Stocks on Bursa Malaysia closed on a positive note yesterday helped by gains in selected blue-chips despite mixed trading on the regional markets. Asian stock markets were traded mixed in cautious environment as poor US corporate earnings and weaker growth in Asia as forecast by the World Bank hit investors’ appetite to buy stocks. The FBM KLCI gained 3.1 points or 0.19% to 1,663.32 after hovering between 1,658.04 and 1,664.98 throughout the day. Gainers beat losers by 424 to 296, while 335 counters were unchanged. Turnover advanced to 1.1 billion shares worth RM1.6 billion from 881.87 million shares worth RM1.27 billion on Monday.
The FBM KLCI opened 1.62 points lower at 1,658.60 and slipped to the intra-day low of 1,658.04 within the first ten minutes of trading, it then rebounded and moved higher to touch the intra-day high of 1,664.98 at late morning before pulling back to move sideways. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates good buying support, and the key index may move higher to challenge the all-time high level of 1,668.32. Immediate overhead resistance zone is at 1,665 to 1,668.
MACD was higher, but its histogram was slightly shorter for a second bar, indicating a weakening of the upward momentum. RSI (14) was higher at 64.6 from 63.2, indicating an improvement in the short term relative strength, and the key index remained in a bullish state. Stochastic was lower at 90.2 and has crossed below the slow stochastic line, indicating a weakening of the market strength and the possible beginning of a short term down cycle. Readings from the indicators showed that the FBM KLCI is still in a bullish state but signs are there that its upward momentum is reducing and hence might goes into a consolidation.
The trend of the FBM KLCI remained up and it is near the record high level now. A break above the 1,668-point level will likely see the FBM KLCI moving higher into the uncharted territory with a target of 1,675 to 1,680, while a break of the immediate downside support of 1,658 provided by the 5-day SMA will likely see the key index sliding lower to the 10-day SMA support at 1,647. Total market volume has broken the one billion shares mark yesterday after staying below it for two weeks, indicating a rekindling of trading interest in the second and third liners.
Overnight, the Dow fell -110.12 points or -0.81% to close at 13,473.53. Today, the FBM KLCI is likely to trade within a range of 1,652 to 1,672.
This week's expected range: 1604 – 1703
Today’s expected range: 1652 – 1672
Resistance: 1666, 1669, 1672
Support: 1652, 1655, 1659