Stocks on Bursa Malaysia extended gains for the second day yesterday on the back of improved sentiment as investors and bargain hunters continued nibbling selectively at value buys after the long Lunar New Year holiday, making the local bourse rise in tandem with most regional peers. MISC was the top contributor to the key index (with its +3.20 points contribution), adding 47 Sen to RM8.05, on news that Petronas had extended the time charter for five of its liquefied natural gas (LNG) carriers for another 10 years. The benchmark FBM KLCI rose 9.29 points, or 0.51%, to 1,818.68, after moving between 1,812.01 and 1,819.24. Gainers outpaced decliners by 432 to 409 while 316 counters were unchanged. Total volume however shrank to 2.2 billion shares worth RM2.1 billion from 2.6 billion shares worth RM2.3 billion on Monday.
The FBM KLCI opened 2.62 points higher at 1,812.01, the intra-day low, and moved higher for the rest of the day with mild intermittent pullback correction. The key index hit an intra-day high of 1,819.24 just before closing but pullback slightly to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control yesterday in driving the index higher. Hence, the FBM KLCI is likely to continue its uptrend today on follow through buying momentum. Immediate overhead resistance zone is at 1,819 to 1,831, while the downside support zone is at 1,812 to 1,804.
MACD hooked upward after turning down a day earlier, and made a golden-cross over the signal-line, indicating an increased in momentum to the upside and a buy signal. RSI (14) rose to 63.5 from 60, indicating the FBM KLCI is turning bullish for the short term. Stochastic rose to 62.5 from 57.3, indicating further gain in the index strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI was gaining momentum and gradually turned bullish, and hence, is likely to move higher.
With bullish upward move yesterday, the FBM KLCI has broken out of the recent sideways range to move higher. The short and medium term trend is up as the FBM KLCI is staying above the short and medium term moving averages, and the 50-day simple moving average (SMA) has also turned upward from sideways. The long term trend is starting to turn up as the key index has closed above the 150-day SMA yesterday, and is poised to move higher to challenge the overhead long term moving average resistance zone of 1,824 to 1,832 posted by the long term moving averages. A successful breakthrough of the resistance zone will likely see the FBM KLCI rallying higher towards the 1,850-point psychological target level.
Overnight, the Dow rose 92.35 points or 0.51% to close at 18,209.19. Today, the FBMKLCI is likely to trade within a range of 1,806 to 1,826.
This week's expected range: 1784 – 1832
Today’s expected range: 1806 – 1826
Resistance: 1821, 1823, 1826
Support: 1806, 1809, 1814
Stocks to watch: AT, CLIQ, DIALOG, ECOFIRS, ESCERAM, FGV, GKENT, HOMERIZ, INSAS, INTEGRA, JAKS, JOBST, KPS, LONBISC, MIECO, NAIM, OKA, PBA, POS, PSIPTEK, SYCAL, WELLCAL
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