Stocks on Bursa Malaysia rebounded to close slightly higher yesterday as investors increased their holdings in selected blue chips. The FBM KLCI rose 4.8 points or 0.29% to 1,635.92 compared with Tuesday’s closing of 1,631.12. Losers led gainers by 357 to 348 while 360 counters closed unchanged. Total volume slipped to 1.232 billion shares worth RM1.756 billion from Tuesday’s close of 1.414 billion shares valued at RM2.033 billion.
The FBM KLCI opened 2.37 points higher at 1.633.49 but slipped to the intra-day low of 1,632.87 within the first five minutes of trading. The key index then rebounded and climbed higher to hit the intra-day high of 1,637.80 before last minute profit-taking activity pulled it to close off high. Chart-wise, the FBM KLCI formed a bullish Harami candlestick pattern which indicates technical rebound, and the key index is likely to move range-bound with an upward bias today. Immediate overhead resistance zone is at 1,638 to 1,642 while the immediate downside support zone is at 1,632 to 1,627.
MACD was marginally lower but its histogram was shorter upward, indicating a state of consolidation. RSI (14) hooked upward to 58.8 from 52.2, reflecting the rebound, and the short term relative strength of the FBM KLCI is still mildly bullish. Stochastic also hooked up slightly to 54.5 and is still above the slow stochastic line, indicating a neutral state of the market strength and the short term cycle is still up. Readings from the indicators showed that the FBM KLCI is in a state of consolidation, and is likely to remain so until a breakout is observed.
The short trend of the FBM KLCI remained sideways as the 5, 10 and 20-day SMA has turned flat, and the key index is just staying slightly above these three short term moving averages. The 10-day SMA support is now at 1,632, and a break of this support level will likely see the FBM KLCI sliding lower towards the 30-day SMA support at 1,626. The medium and longer term trend, nevertheless, is still up. Overall volume still remained low, and higher trading volume is needed for a further advance towards 1,650 and 1,665-point target levels, otherwise, profit-taking will likely cap gains in this ongoing August reporting season.
Overnight, the Dow rose +7.04 points or +0.05% to close at 13,175.64. Today, the FBM KLCI is likely to trade within a range 1,628 to 1,643.
This week's expected range: 1614 – 1648
Today’s expected range: 1628 – 1643
Resistance: 1638, 1641, 1643
Support: 1628, 1630, 1633
Stocks to watch: BENALEC, UOADEV, NAIM, WEIDA, ASUPREM