Stocks on Bursa Malaysia ended mixed yesterday on profit-taking despite recording fresh intra-day high in early trade. The market was unable to sustain its positive momentum as profit-taking started to set in among key blue chips. The FBM KLCI fell 1.1 points or 0.07% to 1,590.24. Advancers led decliners by 368 to 355 while 355 counters closed unchanged. Volume rose to 1.27 billion shares worth RM2.07 billion from 1.11 billion shares worth RM2.15 billion on Wednesday.
The FBM KLCI opened with an up gap of 2.31 points at 1,594.13 and surged to the intra-day high of 1,595.87, a new record high, within the first ten minutes, and heavy profit-taking activity immediately set in which pressed the key index continuously lower to hit the intra-day low of 1,587.88 before rebounding slightly to close off low at 1,590.24. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which indicates profit-taking and distribution by the bears. The key index is likely to take a breather to correct or consolidate itself after rising to a new high. Immediate key support levels for the FBM KLCI are envisaged at 1,580, 1,577 and 1,566.
MACD was higher, but its histogram was shorter, reflecting the correction that the key index is currently undergoing. The momentum, however, remained positive. RSI (14) hooked downward to 71.99 from 73.4 a day earlier after entering the technical short term overbought zone. Nonetheless, the key index is still in the very bullish zone. Stochastic has turned upward, but is still below its slow stochastic line, indicating the correction may not be over yet. Readings from the indicators showed that the FBM KLCI is undergoing a pullback correction, however, the underlying strength and momentum is still positive.
The underlying uptrend of the FBM KLCI remained intact as the key index continued to stay above all the short, medium and long term moving averages. The correction yesterday is considered a healthy one after the FBM KLCI rose to a new level. Immediate target level for the FBM KLCI would be the 1,600-point psychological level which is likely to be tested after the current correction is over. As the volume is improving, active rotational play among the second and third liners is likely continue, while the key index may consolidate itself.
Overnight, the Dow rose +93.47 points or +0.74% to close at 12,719.49. Today, the FBM KLCI is likely to trade within a range of 1,578 to 1,604
This week's expected range: 1545 – 1606
Today’s expected range: 1578 – 1604
Resistance: 1595, 1599, 1604
Support: 1578, 1583, 1586
Stocks to watch: IVORY, PERWAJA, WCT