KLCI_20110706

Stocks on Bursa Malaysia closed broadly higher yesterday with the key benchmark FBM KLCI hitting an all-time high. Most blue-chips regained ground with investors upbeat over the country’s economy. Investors were encouraged by the positive economic news flow from the six Strategic Reform Initiatives announced by the government the day before to boost Malaysia’s competitiveness. The benchmark FBM KLCI ended 9.49 points or 0.6% higher at its peak of 1,591.34. Advancer led decliners by 453 to 287 while 342 counters closed unchanged. A total of 1.11 billion shares, worth RM2.15 billion, were traded against Tuesday’s 728.65 million shares, valued at RM1.463 billion. 


The FBM KLCI opened 0.36 point higher at 1,582.21 and fell on mild profit-taking to touch the intra-day low of 1,580.46 within the first ten minutes. The key index rebounded and moved into the positive territory and ascended higher for the rest of the day to close at another new historic peak of 1,591.34. Chart-wise, the FBM KLCI formed a bullish white candlestick without upper shadow which indicates the bulls were in control for the day, and is likely to continue charging forward to test the 1,600-point psychological resistance level. 


MACD has again pickup to climb higher, indicating a resumption of the upward momentum. RSI (14) has hooked upward to 73.4 after retreating for two days, indicating the relative strength of the key index has turned very bullish and the entering into the short term overbought zone. Stochastic was just marginally lower and is turning flat, indicating a slow down of the recent downward corrective strength. Readings from the indicators showed that the FBM KLCI has again turned bullish after two days of consolidation, and is likely to continue its journey into the uncharted territory. 


The FBM KLCI is currently closing above all its short, medium and long term moving averages, and is thus in a very bullish state. Immediate overhead resistance is at the 1,600-point psychological level, while the downside support zone is at 1,580 to 1,577. With the volume again pick up to above 1 billion shares, the overall market is likely to see more rotational play among the second and third liners while the benchmark bellwether continue its journey into the unknown territory.


Overnight, the Dow rose +56.15 points or +0.45% to close at 12,626.02. Today, the FBM KLCI is likely to trade within a range of 1,573 to 1,603


This week's expected range: 1545 – 1606

Today’s expected range: 1573 – 1603


Resistance: 1595, 1599, 1603

Support: 1573, 1576, 1584