Stocks on Bursa Malaysia closed mixed yesterday with the FBM KLCI closed at a new high of 1,674.67, up 2.11 points or 0.13% from Monday's close after opening 1.74 points lower at 1,670.82, amid strong buying in key finance and plantation counters. Finance blue chips were a major influence in keeping the key index up. Losers led gainers by 384 to 292, while 375 were unchanged. Volume turnover fell to 1.11 billion shares valued at RM1.17 billion from 1.26 billion shares valued at RM1.38 billion on Monday.
The FBM KLCI opened 1.74 points lower at 1,670.82 and slid to the intra-day low of 1,670.45 within the first five minutes of trading. It rebounded strongly to rally to the intra-day high of 1,677.50 and turned soft on profit-taking activity to move sideways. Chart-wise, the FBM KLCI formed a bullish white piercing-line candlestick pattern which indicates the fight back of the bulls after being sold down from the historical high of 1,679.37. However, yesterday's price action showed that the bulls lacked follow through momentum and registered a lower intra-day high compared with Monday's high. Hence, the FBM KLCI is likely to move range-bound today with immediate strong overhead resistance at 1,679.
MACD and its histogram were both slightly higher, indicating continued increase in the bullish momentum in a slow pace. RSI (14) was also higher at 67.8 from 66.5, indicating an improvement in the short term relative strength and bullishness of the key index. Stochastic, however, was lower at 86.2 from 87.9, indicating a state of consolidation. Readings from the indicators showed that the FBM KLCI is in a bullish state but is likely to consolidate.
The FBM KLCI is currently on a bullish uptrend and is at the record high level. It is likely to take a short breather at current level to consolidate itself before charging further to the uncharted territory. The immediate upside target of 1,685, follow by a short term target of 1,693 and a short medium term target of 1,705 and 1,721 remained unchanged. Immediate downside support zone is at 1,670 to 1,665 provided by the 5 and 10-day SMA.
U.S. market remained closed yesterday due to the powerful Hurricane Sandy hitting the U.S. east coast. Today, the FBM KLCI is likely to trade within a range of 1,663 to 1,685.
This week's expected range: 1648 – 1685
Today’s expected range: 1663 – 1685
Resistance: 1678, 1681, 1685
Support: 1663, 1667, 1670
Stocks to watch: COASTAL, THHEAVY, INCKEN, L&G, SYSCORP