Stocks on Bursa Malaysia closed higher yesterday, extending their gains from last week as investors’ appetite for riskier assets grew, influenced by the 2013 Budget announcements that focused on efforts to reduce fiscal deficit. The FBM KLCI rose by 6.65 points or 0.41% to close at 1,643.31 after opening 1.28 points lower at 1,635.38. Gainers led losers by 342 to 318 while 322 counters were unchanged. Turnover fell to 807.468 million shares worth RM1.07 billion from 994.31 million shares worth RM1.8 billion last Friday.
The FBM KLCI opened 1.28 points lower at 1,635.38 and slipped to the intra-day low of 1,633.39 in morning trading, and it rebounded to move higher to hit the intra-day high of 1,644.86 at mid afternoon before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick and has risen consecutively for the fifth sessions. It is likely to climb further if the buying momentum continues, and the immediate overhead resistance zone is at 1,645 to 1,651.
MACD continued to climb higher and has made a golden-cross over the signal-line, flashing out a buy signal. Nevertheless, as MACD is still below the zero-line, the golden-cross should be taken with cautious view. RSI(14) was higher at 56.4 from 53.1, indicating an improvement in the short term relative strength of the FBM KLCI to a mildly bullish state. Stochastic was higher at 71.8, indicating a continuation of the short term up cycle and further strengthening of the upward momentum. Readings from the indicators showed that the FBM KLCI is gradually turning bullish, and is likely to move higher.
The trend of the FBM KLCI has again turned bullish and up as it is now closing above all the short, medium and long term moving averages and has broken out of the downtrend channel. However, it still have to close above the 1,651-point level in order to confirm the uptrend, otherwise, the up move over the last five sessions may just be a technical rebound on a downtrend indicated by the downtrend channel. Immediate strong overhead resistance is expected at 1,651 and 1,655-point levels, while the immediate downside support level is at 1,633. Total volume has shrunk to below one billion shares, indicating a lack of interest in the market.
Overnight, the Dow rose 77.98 points or +0.58% to close at 13,515.11. Today, the FBM KLCI is likely to trade within a range of 1,624 to 1,656.
This week's expected range: 1564 – 1684
Today’s expected range: 1624 – 1656
Resistance: 1648, 1652, 1656
Support: 1624, 1629, 1636