Stocks on Bursa Malaysia ended higher yesterday led by gains in selected heavyweights. The local bourse was generally supported by buying interest in newly-listed Bumi Armada which was the top gainer and most actively traded stock yesterday. The FBM KLCI ended 3.22 points or 0.21% or better at 1,565.81. Market breadth was positive with 386 gainers compared with 321 losers while 349 were unchanged. Trading volume increased to 1.2 billion shares, worth RM2.6 billion, from 803.41 million shares, worth RM1.3 billion, transacted on Wednesday. The FBM KLCI opened 1.04 point higher at 1,563.63 and surged to the intra-day high of 1,566.20 within the first fifteen minutes, and profit-taking activity sent the key index into the negative territory to touch the intra-day low of 1,560.59 near noon before recovering to close near the day’s high. Chart-wise, the FBM KLCI formed a small white hammer-like candlestick which indicates the bears were initially strong in pushing down the index but later the bulls staged a counter attack to push the index to a level near the high of the day. The FBM KLCI is thus likely to continue its momentum to move higher. However, the key index is likely to meet heavy resistances at the 1,566 to 1,577 zone.
MACD was lower but at a reduced pace, as shown by the shorter histogram, indicating a reduction in the downward momentum. RSI (14) continued to climb higher to 47.2, is approaching the neutral zone from the mildly bearish zone. Stochastic has hooked up to 19.5 after hitting the low of 10.8 the day before. Readings from the indicators showed that the FBM KLCI is undergoing a rebound. As the momentum and market strength is still relatively weak, the rebound may not go very far.
The short term trend of the FBM KLCI remained down as the key index continued to stay below the short term moving averages. The medium and long term trend, however, remained up. Immediate overhead resistance zone is at 1,566 to 1,577, while the downside support zone is at 1,560 to 1,552.
Overnight, the Dow rose +152.50 points or +1.21% to close at 12,724.41. Today, the FBM KLCI is likely to trade within a range of 1,556 to 1,572.
This week's expected range: 1544 – 1606
Today’s expected range: 1556 – 1572
Resistance: 1568, 1570, 1572
Support: 1556, 1558, 1562