Stocks on Bursa Malaysia ended on a mixed note yesterday as regional markets fell as investors switch their focus away from signs of stable US growth, looking instead at tepid global corporate earnings and the uncertain economic outlooks. The FBM KLCI, however, closed at an all-time high of 1,672.56, up 0.67 point, after opening 6.41 points higher at 1,678.30 on late buying support in key heavyweights. It touched a fresh all-time intra-day high of 1,679.37. Losers led gainers by 331 to 376, with 334 counters unchanged. Volume rose to 1.26 billion shares valued at RM1.38 billion from 1.44 billion shares valued at RM1.28 billion last Friday.
The FBM KLCI opened with an up gap of 6.41 points at 1,678.30 and surged to the all-time intra-day high of 1,679.37 within the first ten minutes of trading. Heavy profit-taking activity sent the benchmark index lower throughout the day into the negative territory to hit the intra-day low of 1,669.81 before a last minute buying on selected key heavyweights which lifted the index to close off low at another all-time high closing. Chart-wise, the FBM KLCI formed a bearish black possible evening star candlestick pattern which indicates heavy distribution after a strong push up at opening, and the key index is likely to continue its profit-taking consolidation today after hitting a fresh all-time high. Immediate support zone is at 1,667 to 1,663 provided by the 5 and 10-day SMA.
MACD continued to climb higher and so is the histogram, indicating a continued increase in the bullish momentum. RSI (14) was marginally higher at 66.5 from 66.1, indicating a mild increased in the short term relative strength and a bullish state of the key index. Stochastic, however, hooked downward to 87.9 from 88.5, issuing a signal that a possible pullback correction is in sight. Readings from the indicators showed that the FBM KLCI is in a bullish state but shown sign of possible correction.
The FBM KLCI is on a bullish uptrend as it is closing above all the short, medium and long term moving averages. However, signs are there that a possible correction is in the brewing, but nonetheless, the correction is expected to be shallow, and the benchmark index is likely to challenge the all-time high after the correction is over. Immediate upside target is pegged at 1,680 and 1,685, follow by 1,693, with 1,705 and 1,721 as the possible yearend target.
U.S. market was closed yesterday as powerful Hurricane Sandy bore down on the U.S. east coast, and the U.S. stock market will remain closed on Tuesday. Today, the FBM KLCI is likely to trade within a range of 1,658 to 1,689.
This week's expected range: 1648 – 1685
Today’s expected range: 1658 – 1689
Resistance: 1678, 1684, 1689
Support: 1658, 1664, 1668
Stocks to watch: ARMADA, CHEETAH, DUTALND, DRBHCOM, NAIM