Stocks on Bursa Malaysia closed mixed yesterday with late buying in selected heavyweight counters pushed the benchmark FBMKLCI to end trading higher, extending last week's gains. Regionally, Asian stock markets were mixed, as investors remained cautious over the US non-farm payrolls report released last week, coupled with uncertainty in global oil prices due to weakening demand in Europe and Asia. The FBMKLCI ended at an intra-day high of 1,735.08, up 2.64 points or 0.15%, after going as low as 1,718.76 throughout the trading day. On the broader market, gainers outpaced losers by 394 to 317 with 286 counters unchanged. Total volume dropped to 1.36 billion shares worth RM1.46 billion from 1.72 billion shares worth RM1.81 billion on Friday.
Following the bearish performance on Wall Street last Friday, the FBMKLCI opened 2.34 points lower at 1,730.10 and plunged to the intra-day low of 1,718.16 in the first thirty minutes, losing 14.28 points at its worst. The key index rebounded from the low and climbed higher gradually for the rest of the day to end at the day’s high. Chart-wise, the FBMKLCI formed a white hammer candlestick, a bottom reversal candlestick pattern which indicates sellers were dominant initially but buyers came in later to take over the control. Hence, the FBMKLCI is likely to stage further rebound today. Immediate overhead resistance zone is at 1,738 to 1,741, while the downside support zone is at 1,718 to 1,706.
MACD and its histogram continued to rise, indicating an increased in the upward momentum. RSI (14) was higher at 46 from 45, indicating a mild gain in the index’s relative strength to the bullish side. Stochastic hooked upward to 45.1 from 42.2 but is still below the slow stochastic line, indicating a mild technical rebound. Readings from the indicators showed that the FBMKLCI staged a mild technical rebound yesterday, and is likely to stay range-bound today with a mild upward bias.
The general trend of the FBMKLCI still remained down as the key index continued to stay below the medium and long term moving averages. Nonetheless, the FBMKLCI is now closing above the 5 and 20-day simple moving average (SMA), but is still bound on top by the 10, 15 and 30-day SMA, indicating the short term trend of the FBMKLCI has turned sideways range-bound, and hence is likely to move within a range of 1,724 to 1,742 based on the moving average support and resistance, and a breakout of the key index from this range will see the FBMKLCI continue to move in the direction of the breakout. On the broader market, the small caps and ACE market counters are showing more resilience with good trading opportunities.
Overnight, the Dow fell 96.53 points or -0.54% to close at 17,640.84. Today, the FBMKLCI is likely to trade within a range of 1,707 to 1,751.
This week's expected range: 1679 – 1785
Today’s expected range: 1707 – 1751
Resistance: 1740, 1745, 1751
Support: 1707, 1713, 1724
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