Stocks on Bursa Malaysia ended on a mixed note last Friday with the FBM KLCI registering an all-time intra-day high of 1,670.16 points, largely driven by the rise in banking stocks led by Public Bank which announced its financial results on Thursday, and also telecommunication stocks. At close, the barometer index ended 0.93 of a point or 0.06% higher at 1,666.35, and week-on-week, it gained 12.99 points from previous Friday's closing of 1,653.36. Losers outnumbered gainers by 409 to 294 while 338 counters were unchanged. Total turnover rose to 1.379 billion shares, worth RM2.186 billion, from Thursday's 1.297 billion shares valued at RM1.533 billion. Weekly turnover rose to 5.956 billion shares worth RM7.976 billion from previous week's 4.477 billion shares worth RM6.601 billion.
The FBM KLCI was basically in a bullish mood last week. It opened last Monday 1.58 points lower at 1,651.78 and slipped to the intra-week low of 1,649.93 but rebounded to close 1.08 points higher at 1,654.44 on last minute buying of selected blue-chips. The FBM KLCI was almost flat on Tuesday, edging down 0.92 of a point to 1,653.52, after moving within a narrow range of between 1,658.5 and 1,652.08. The benchmark index regained its bullishness from Wednesday onwards to hit a fresh all-time high of 1,670.16 on Friday before pulling back on profit-taking activity ahead of the weekend to close at a fresh record high of 1,666.35.
On the weekly chart, the FBM KLCI formed a bullish engulfing candlestick pattern which indicates the bulls were charging to push the key index higher, and ended the week on a new record high. Hence, the FBM KLCI is likely to extend its uptrend this week. On the daily chart, the FBM KLCI formed a white inverted hammer candlestick (or a shooting star-like candlestick formation), a top reversal candlestick pattern, which indicates heavy profit-taking and sell out after the index hit a fresh new record high of 1,670.16, and the FBM KLCI is likely to take a breather at this level to consolidate itself before staging a re-test of the psychological resistance of 1,670-point. Immediate downside support is at 1,660 provided by the 5 and 10-day SMA.
Weekly MACD was higher and is just slightly below the weekly signal-line, indicating a further improvement in the weekly momentum, and the weekly MACD is about to make a golden-cross. Daily MACD and its histogram continued to climb higher, indicating an increase in the bullish momentum on the daily perspective. Weekly RSI (14) was higher at 63.3 from previous week's 60.7, indicating a further improvement in the weekly relative strength in the bullish zone. Daily RSI (14) was marginally higher at 64.3 from 63.8, indicating the FBM KLCI is in a bullish state. Weekly Stochastic was higher at 87.7 and the daily stochastic is at 86.2, both indicating the key index is on a bullish up cycle. Readings from the weekly and daily indicators showed that the FBM KLCI is currently in a bullish mood and the momentum is picking up.
The FBM KLCI is now on a bullish uptrend as it is closing above all the short, medium and long term moving averages. The fact that the FBM KLCI broke the previous all-time high level of 1,668.32 and pulled back to close below it, indicated a false breakout which forewarn of a further correction. However, the correction is expected to be shallow, and the FBM KLCI is likely to re-challenge the record high of 1,670.16, and a successful breakthrough will see the benchmark index moving into the uncharted territory with an immediate term target of 1,675 to 1,685, and a medium term target of 1,693, and a longer term target of 1,705 to 1,721.
Last Friday, the Dow fell 205.43 points or -1.52% to close at 13,343.51. This week, the FBM KLCI is likely to trade within a range of 1,632 to 1,691, and today, the FBM KLCI is likely to trade within a range of 1,659 to 1,675.
This week's expected range: 1632 – 1691
Today’s expected range: 1659 – 1675
Resistance: 1669, 1672, 1675
Support: 1659, 1662, 1664