Stocks on Bursa Malaysia ended higher yesterday as last-minute buying emerged in selected heavyweights. Most investors took the opportunity to buy beaten-down stocks which offered attractive valuations after the recent correction. However, sentiment on the broader market remained bearish as investors stayed on the sidelines awaiting the outcome of the US Federal Reserve’s policy meeting later yesterday. The FBM KLCI rose 6.56 points or 0.42% to close at 1,567.35. Market breadth was bearish with 383 losers compared with 362 gainers while 327 were unchanged. Volume declined to 847.12 million shares, worth RM1.52 billion, compared with Tuesday’s 952.98 million shares worth RM1.56 billion.
The FBM KLCI opened 0.90 point higher at 1,561.69 and moved to the morning session high of 1,565.34 before profit-taking activities pressed it down to the intra-day low of 1,559.95, and last minute buying of selected blue-chips pushed the key index to close at the day’s high of 1,567.35. Chart-wise, the FBM KLCI formed a bullish white candlestick which made a breakout of the resistance level at 1,566. With this bullish move, the benchmark index is likely to continue its upward momentum to climb higher to re-test the historical high level of 1,576.95. However, as the close was a last minute job, one has to be careful that this could turn out to be a bull-trap.
MACD was higher, indicating a pick up in the momentum. RSI (14) was higher at 63.2, indicating the relative strength of the key index has turned bullish. Stochastic was higher at 87.4 indicating the short term up cycle is intact, and the market strength is turning strong. Readings from the indicators showed that the FBM KLCI is gradually turning bullish, and might continue with its upward momentum to move higher.
As the FBM KLCI is closing above all the short, medium and long term moving averages, the trend of the benchmark index is currently up. Immediate overhead resistance zone is at 1,570 to 1,577, while the downside support zone is at 1,556 to 1,550. With volume continue to stay below the 1 billion shares mark, the overall market is likely to continue to drift sideways while waiting for fresh leads.
Overnight, the Dow fell -80.34 points or -0.66% to close at 12,109.67. Today, the FBM KLCI is likely to trade within a range of 1,555 to 1,575.
This week's expected range: 1529 – 1585Today’s expected range: 1555 – 1575
Resistance: 1570, 1573, 1575Support: 1555, 1557, 1562