Stocks on Bursa Malaysia closed higher yesterday, lifted by interests in heavyweights, especially Petronas-linked companies. The local bourse rebounded in line with overnight gains on Wall Street after the Greek anti-austerity Syriza party won the general elections in Greece. At close, the benchmark FBM KLCI stood at 1,803.17, up 6.73 points or 0.37%, after opening 6.48 points lower at 1,789.96 and fluctuated between 1,788.55 and 1,810.21 throughout day. Gainers outpaced decliners by 447 to 366, while 314 counters were unchanged. Total turnover rose to 2.1 billion units valued at RM2.2 billion from 1.9 billion units valued at RM2.1 billion on Monday.
The benchmark FBM KLCI opened yesterday 6.48 points lower at 1,789.96 and slipped to hit the intra-day low of 1,788.55 fifteen minutes after opening, losing 7.89 points at its worst. The key index rebounded from the low and rallied to hit the intra-day high of 1,810.21 in the next five minutes, making 13.77 points gains at its best. However, the rally found no follow through and the index pullback on profit-taking to move sideways range-bound for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which engulfed the previous day’s black hangman candlestick, indicating the bulls took control later after being beaten at the opening, and the FBM KLCI found strong resistance at 1,810-point level. Hence, the FBM KLCI is likely to stay in range-bound consolidation today. Immediate overhead resistance zone is at 1,810 to 1,821, while the downside support zone is at 1,788 to 1,770.
MACD and its histogram continued to climb higher, indicating further increased in the upward momentum. However, the small increment in the histogram showed that the upward momentum is reducing. RSI (14) hooked upward to 65.5 from 63.8, indicating a rebound and the relative strength of the FBM KLCI is still in the bullish state. Stochastic was almost flat at 91.3 from 91.2, indicating a state of consolidation. Readings from the indicators showed that the FBM KLCI is likely to go into a consolidation as the momentum is reducing.
The technical picture of the FBM KLCI remained very much unchanged with the short term trend still remained up, and the medium term trend has turned sideways from downtrend before as the 50 and 60-day SMA have turned flat, while the long term trend is still down as the FBM KLCI continued to stay below the long term moving averages. As of yesterday, the FBM KLCI has closed above the long term 100-day SMA for a second time after opening below it. In order for the FBM KLCI to turn long term bullish again, the key index must break through the cluster of long term moving averages forming the immediate overhead resistance zone at 1,810 to 1,835, where 1,810 is posted by the 120-day SMA, while 1,835 is posted by the 200-day SMA. Coincidentally, the resistance level of 1,810-point is also the 61.8% Fibonacci retracement level for the range measuring from the all-time high of 1,896.23 to the recent low of 1,671.82. A breakthrough of the 1,810-point resistance level will see the FBM KLCI rallying higher to test the next resistance zone of 1,821 to 1,835.
Overnight, the Dow plunged 291.49 points or -1.65% to close at 17,387.21. Today, the FBMKLCI is likely to trade within a range of 1,769 to 1,831.
This week's expected range: 1698 – 1873
Today’s expected range: 1769 – 1831
Resistance: 1812, 1822, 1831
Support: 1769, 1778, 1791
Stocks to watch: ASIABIO, BENALEC, CMSB, EAH, EFFICEN, EFORCE, FGV, FLBHD, HOHUP, KULIM, MKH, MUDAJYA, NIHSIN, OKA, OPENSYS, SALCON, SUCCESS, SYSTECH, TROP, VITROX
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