Stocks on Bursa Malaysia ended broadly higher yesterday, recovering from three trading days of losses, in tandem with firmer regional bourses following news that US congressional leaders have agreed to raise the debt limit and cut government spending to avoid a potentially disastrous default. The FBM KLCI finished 9.20 points to 1,558.01 after opening 0.98 point higher at 1,549.79. Gainers beat losers by 553 to 225 with 300 counters unchanged. Turnover was lower at 1.009 billion shares, worth RM1.452 billion, from 1.107 billion shares, worth RM1.716 billion, registered last Friday.
The FBM KLCI opened 0.98 point higher at 1,549.79 and climb higher to touch the intra-day high of 1,558.49. It was hovering near the high in a tight range for most part of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick with short lower and upper shadows which indicates the bulls were in control for the day, and it may continue its upward momentum to move higher today. The bullish candlestick marked a strong technical rebound of the key index, but the short term trend is still down. In order for the FBM KLCI to reverse its short term downtrend, the key index must close above the 1,570-point level.
MACD turned sideways, and the histogram also turned shorter upward, indicating a reduction in the downward momentum. RSI (14) hooked upward to 44.9, indicating the relative strength of the key index has turned from bearish to mildly bearish. Stochastic reversed upward to 18.2 and had crossed above its slow stochastic line, reflecting the rebound in the key index. Readings from the indicators reflected the rebound in the FBM KLCI; however, a trend reversal will require one or two more days’ data for confirmation.
The short term trend of the FBM KLCI remained down despite the strong rebound yesterday. To reverse the current short term downtrend, the key index will have to close above at least the 1,566-point level and follow by the 1,570-point level. The medium term trend has turned sideways while the long term uptrend remained intact. Immediate overhead resistance zone is at 1,560 to 1,570, while the immediate downside support zone is at 1,549 to 1,544.
Overnight, the Dow fell -10.75 points or -0.09% to close at 12,132.49. Today, the FBM KLCI is likely to trade within a range of 1,543 to 1,568.
This week's expected range: 1520 – 1586
Today’s expected range: 1543 – 1568
Resistance: 1562, 1565, 1568
Support: 1543, 1546, 1552
Stocks to watch: E&O, MBSB, RANHILL