Stocks on Bursa Malaysia ended higher yesterday on the first trading day of the Year of the Goat spurred by light buying in small-capitalised stocks and selected blue chips. Trading in Bursa Malaysia was mostly dominated by lower-liners, with the benchmark index constituents barely moving. The benchmark FBM KLCI ended 1.52 points or 0.08% better at 1,809.39 after moving between 1,804.95 and 1,812.75. Gainers outpaced losers by 428 to 382, with 290 counters unchanged. Total volume rose to 2.6 billion shares worth RM2.3 billion from 897.03 million shares worth RM887.37 million last Wednesday.
Taking cue from the strong close on Wall Street last Friday, the FBM KLCI opened 3.14 points higher at 1,811.01 but slipped lower on profit-taking activity to hit the intra-day low of 1,804.95 forty minutes after opening. The key index rebounded from the low and climbed higher gradually to touch the intra-day high of 1,812.75 but some late hour profit-taking pulled the index to lose off high. Chart-wise, the FBM KLCI formed a black hangman candlestick which indicates mild selling pressure on profit-taking and consolidation, and hence, the FBM KLCI is likely to further consolidate today. Immediate overhead resistance zone is at 1,812 to 1,815, while the downside support zone is at 1,804 to 1,800.
MACD slipped lower and made a dead-cross over the signal-line, indicating a loss in momentum and consolidation. RSI (14) hooked upward slightly to 60 from 59.5, indicating a weak rebound and the FBM KLCI is still short term bullish. Stochastic was marginally higher at 57.3 from 57, indicating a state of consolidation. Readings from the indicators showed that the FBM KLCI is losing its upward momentum and going into a state of consolidation.
The immediate or near term trend of the FBM KLCI has turned sideways range-bound as the key index continued to move within a narrow range of 1,800 to 1,818. Nevertheless, the short and medium term trend is still up, while the long term trend is down but with an upward bias as the FBM KLCI is staying below the cluster of long term moving averages of 150, 200, 240, 300 and 360-day SMA, but is above the 100 and 120-day SMA. Thus, for the near term the FBM KLCI is likely to stay sideways range-bound within a range of 1,780 to 1,831, and a breakout on either side of the range will see the key index moving in the direction of breakout. On the broader market, rotational play on small-caps and ACE market stocks is likely to dominate the active scene as can be seen from the volume that hit above two billion shares yesterday.
Overnight, the Dow fell 23.60 points or -0.13% to close at 18,116.84. Today, the FBMKLCI is likely to trade within a range of 1,797 to 1,820.
This week's expected range: 1784 – 1832
Today’s expected range: 1797 – 1820
Resistance: 1813, 1816, 1820
Support: 1797, 1801, 1805
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