Stocks on Bursa Malaysia finished higher yesterday on continuous buying support in selected blue chips throughout the day. The local bourse was moving in tandem with other regional peers as major Asian indices displayed encouraging performance ahead of the European Central Bank (ECB) meeting later of the day. At close, the benchmark FBM KLCI stood at 1,781.75, up 11.66 points or 0.66%, after opening 2.35 points lower at 1,767.74. Gainers trounced losers by 664 to 253, while 288 counters were unchanged. Total volume rose to 2.6 billion units worth RM2.9 billion from 2.2 billion units worth RM2.5 billion on Wednesday.
The benchmark FBM KLCI opened 2.35points lower at 1,767.74 and slipped lower to hit the intra-day low of 1,763.68 twenty minutes after opening. The FBM KLCI rebounded from the low and rallied to hit the intra-day high of 1,787.91 in the next thirty five minutes, making a gain of 17.82 points. However, profit-taking activity capped the key index to move sideways range-bound for the rest of the day to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day and continued the uptrend from the previous day. Hence, the FBM KLCI is likely to continue to climb higher today on follow through buying. Immediate overhead resistance zone is at 1,787 to 1,800, while the immediate downside support zone is at 1,770 to 1,763.
MACD climbed higher and has crossed above the zero-line, issuing a buy signal, and the histogram further extended upward, indicating an increased in the upward momentum. RSI (14) was higher at 61.5 from 58.1, indicating the short term relative strength of the FBM KLCI has turned bullish from a mildly bullish state. Stochastic was higher at 88 from 81.2, indicating the key index is turning stronger and a continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is turning bullish and is likely to climb higher on follow through buying momentum.
The short term trend of the FBM KLCI is up and bullish as the FBM KLCI is staying above all the short term simple moving averages (SMA), and the medium term trend has also just turned up as the key index is closing firmly above the 50 and 60-day SMA. Nonetheless, the longer term trend is still down as the FBM KLCI continued to stay below the cluster of the long term moving averages. In order to turn fully uptrend, the FBM KLCI will have to break through the long term moving average resistance zone at 1,801 to 1,835, where 1,801 is posted by the 100-day SMA, while the upper most resistance is by the 200-day SMA. For now, the general sentiment of Bursa Malaysia has turn mildly bullish and the Chinese New Year rally has begun.
Overnight, the Dow rose 259.70 points or 1.48% to close at 17,813.98. Today, the FBMKLCI is likely to trade within a range of 1,743 to 1,812.
This week's expected range: 1692 – 1783
Today’s expected range: 1743 – 1812
Resistance: 1791, 1802, 1812
Support: 1743, 1753, 1767
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