Stocks on Bursa Malaysia ended slightly lower last Friday, tracking losses in selected blue-chips on mild profit-taking. Investors took profits in late trading following Thursday's sharp gains as the local bourse failed to move up in the absence of fresh external catalysts ahead of the release of monthly report on jobs situation in the US. The FBM KLCI lost 1.24 points or 0.07% to 1,660.23 after hitting a fresh new all-time intra-day high of 1,668.32. On a weekly basis, the FBM KLCI gained 23.57 points compared with 1,636.66 the previous Friday. Gainers beat losers by 359 to 334, while 363 counters were unchanged. Turnover rose to 979.983 million shares worth RM1.385 billion from 965.036 million shares worth RM1.596 billion on Thursday, while weekly volume in turnover eased to 4.430 billion shares worth RM7.047 from 4.431 billion shares worth RM7.457 billion the previous week.
The FBM KLCI was basically in a bullish mode last week after the announcement of the Budget 2013. It opened the week 1.28 points lower at 1,635.38 but made a gain of 6.65 points to close at 1,643.31 on Monday. The FBM KLCI continued to move higher over the week on strong buying momentum which sent it to a new all-time intra-day high level of 1,668.32 on Friday before profit-taking activity pressed it to close off high at 1,660.23.
On the weekly chart, the FBM KLCI formed a bullish white candlestick which confirmed the bottom reversal signal generated by the piercing-line candlestick formed the previous week. Now that it closed above the previous historical high level of 1,655.49, it is likely that the key index may continue to move higher into the uncharted territory. On the daily chart, the FBM KLCI, however, formed a bearish dark-cloud-cover candlestick pattern, a top reversal candle pattern, which indicates profit-taking activity was dominant after the key index recorded another new all-time intra-day high level of 1,668.32, and hence the key index is likely to take a breather to consolidate its gain after a good run last week. Immediate downside support is expected at 1,655-point level while the overhead resistance level is at 1,668.
Weekly MACD has hooked upward and its histogram also contracted upward, indicating a reversal of the weekly momentum from down to up. However, as the weekly MACD line is still below the signal-line, more data is required to confirm the reversal. Daily MACD and its histogram continued to climb higher, indicating a continued improvement in the daily momentum. Weekly RSI (14) was higher at 62.9 from 58.1 previously, indicating the weekly relative strength of the FBM KLCI has turned bullish. Daily RSI (14) hooked down slightly to 63.2 from 64.1, reflecting the correction but the daily relative strength is still in the bullish state. Weekly Stochastic rose slightly to 72.1 from 71.6, but is still below the slow weekly stochastic line, indicating the up move was not strong enough to reverse the weekly down cycle yet. Daily Stochastic has hooked downward to 93.5 from 97, reflecting the profit-taking correction after entering the short term overbought zone. Nonetheless, the short term daily up cycle is still intact. Readings from the weekly indicators showed that the FBM KLCI is in a technical rebound state but with an upward bias. However, the daily indicators' readings showed that the key index has regained its bullishness but is overbought, and hence may consolidate.
The trend of the FBM KLCI is currently up and bullish as the key index is staying above all the short, medium and long term moving averages. However, as the key index has run up continuously over the last two weeks from the low of 1,595.85 registered on 24th September to the high of 1,668.32 on last Friday, making a gain of 72.47 points in two weeks, the key index is likely to take a breather to consolidate itself before re-testing the recent historical high level. Immediate short term target for the FBM KLCI is envisaged at 1,675 to 1,678, while the medium to longer term target is at 1,692 to 1,705-point level.
Last Friday, the Dow rose 34.79 points or +0.26% to close at 13,610.15. This week, the FBM KLCI is likely to trade within a range of 1,604 to 1,703. Today, the FBM KLCI is likely to trade within a range of 1,648 to 1,677.
This week's expected range: 1604 – 1703
Today’s expected range: 1648 – 1677
Resistance: 1666, 1671, 1677
Support: 1648, 1653, 1657