Stocks on Bursa Malaysia closed higher yesterday on the back of selective buying of blue-chip counters ahead of the Hari Raya Haji holiday tomorrow. The local bourse ignored Wall Street’s weak overnight close which was affected by poor corporate earnings and concerns about Spain’s economy. The exchange performed broadly in line with some regional peers as the China purchasing managers’ index advanced to 49.1 points in October from 47.9 points in September. The FBM KLCI was 3.09 points or 0.19% higher at 1,667.99, a fresh record high, after opening 1.43 points lower at 1,663.47, and hovered between 1,661.03 and 1,670.09 throughout the day. Gainers led losers by 410 to 272, with 348 counters unchanged. Volume rose to 1.13 billion shares worth RM1.46 billion from the 1.01 billion shares valued at RM1.36 billion on Tuesday.
Taking cue from the weak performance on Wall Street overnight, the FBM KLCI opened 1.43 points lower at 1,663.47 and slipped to the intra-day low of 1,661.03 within the first two minutes of trading. The key index swung up strongly to hit the intra-day high of 1,670.09 in the next two minutes, and pulled back to move sideways for the rest of the day and closed at another new record high. Chart-wise, the FBM KLCI formed a bullish white candlestick which continues the previous up move, and indicated that the bulls were in control, and the key index is likely to move higher today to continue challenging the resistance zone of 1,668 to 1,670.
MACD has turned up and the histogram also expanded upward after two days of contraction, indicating a pickup of the upward momentum. RSI (14) was higher at 63.7 from 61.8, indicating an improvement in the index's short term relative strength and is higher into the bullish zone. Stochastic was almost flat at 78.2 from 78.5, indicating the short term down cycle may take a turn. Readings from the indicators showed that the FBM KLCI is currently bullish and is likely to extend its gains.
The FBM KLCI is currently in a bullish uptrend as it is staying above all the short, medium and long term moving averages. Immediate strong overhead resistance zone is at 1,668 to 1,670, and a break of the psychological resistance level of 1,670-point, will likely see the key index moving higher into the uncharted territory with an immediate term target of 1,675 to 1,685, and a medium target of 1,693, and a longer term target of 1,705 to 1,721.
Overnight, the Dow fell 25.19 points or -0.19% to close at 13,077.34. Today, the FBM KLCI is likely to trade within a range of 1,653 to 1,679.
This week's expected range: 1632 – 1691
Today’s expected range: 1653 – 1679
Resistance: 1672, 1675, 1679
Support: 1653, 1657, 1662
Stocks to watch: MRCB, UEMLAND, SEALINK, MIECO, TADMAX