Stocks on Bursa Malaysia ended on a mixed note yesterday following the dual listings of IHH Healthcare Bhd (IHH) on the Malaysian and Singapore stock markets. Asia’s largest hospital operator, IHH, debuted on the Bursa Malaysia’s Main Market at RM3.07 for a 27-sen premium from its RM2.80 initial public offering price, with 35.771 million shares transacted. The stock closed at RM3.09, up 29 sen. At the close, the FBM KLCI which opened at 1,631.01 rose 2.52 points, or 0.15%, to 1,635.09 after hovering between 1,624.88 and 1,635.09 throughout the day. Decliners led advancers by 448 to 298 while 313 counters closed unchanged. Total volume rose to 1.32 billion shares valued at RM2.49 billion from Tuesday’s 845.75 million shares valued at RM1.51 billion.
Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened 1.56 points lower at 1,631.01 and slipped to the intra-day low of 1,624.88 within the first five minutes of trading. The key index then rebounded and moved range-bound for a major part of the day in the negative territory before closing in the positive territory. Chart-wise, the FBM KLCI formed a bullish white hammer candlestick which is a bottom reversal candlestick pattern, and hence, the key index is likely to continue its rebound to move higher today.
MACD slip lower and so is the histogram, indicating a continued loss in momentum and reflected the correction. RSI (14) hooked upward to 63.9 from 62.4, reflecting the rebound, and the short term relative strength is still in the bullish zone. Stochastic slipped lower to 65.5 and is below the slow stochastic line, indicating a continuation of the down cycle and weakening of the short term market strength. Readings from the indicators showed that the FBM KLCI is still in the correction mode and is likely to consolidate.
The immediate short term trend of the FBM KLCI is currently down as the index has closed below the 5 and 10-day SMA. Nevertheless, the medium and longer term uptrend is still intact. Immediate overhead resistance zone is at 1,636 to 1,638 posted by the 10 and 5-day SMA. If the FBM KLCI is able to breakthrough this resistance zone, then it might continue to move higher to re-test the recent high. The downside support zone is at 1,624 to 1,614 provided by the 20 and 30-day SMA. Total volume has risen above the one billion shares level, contributed mainly by IHH. However, the overall market is still quiet, waiting for catalyst.
Overnight, the Dow rose +58.73 points or +0.47% to close at 12,676.05. Today, the FBM KLCI is likely to trade within a range of 1,618 to 1,646.
This week's expected range: 1612 – 1668
Today’s expected range: 1618 – 1646
Resistance: 1639, 1642, 1646
Support: 1618, 1621, 1628
Stocks to watch: PWROOT, MKLAND, HINGYAP