Bursa Malaysia closed year 2012 with a bang on Monday as last-minute buying in blue-chips and selected heavyweights pushed the FBM KLCI to close at an all-time high of 1,688.95. The benchmark index which started the last trading day of the year with mild profit-taking, rose during the last ten minutes with fund managers buying selected blue-chips and heavyweights. The FBM KLCI gained 7.62 points or 0.45% at the close, with plantation-based blue-chip, Kuala Lumpur Kepong, contributing 4.109 points to the benchmark index's rise. Gains on heavyweights like Petronas Chemicals and Maybank also contributed to the rise. The barometer index rose 10.34 per cent compared to 1,530.73 recorded on Dec 30, 2011. Losers led gainers by 375 to 318 while 322 counters were unchanged. Total volume fell slightly to 834.802 million shares worth RM1.314 billion from 853.829 million shares valued at RM1.276 billion on Friday.
Taking cue from the weak performance of Wall Street last Friday, the FBM KLCI opened lower with a down gap of 2.93 points at 1,678.40 and slipped to the intra-day low of 1,673.69 within the first twenty minutes of trading. The key index rebounded slightly and moved sideways for most part of the day in the negative territory, however, a last minute buying of selected blue-chips lifted the FBM KLCI to close at an all-time-high level. Chart-wise, the FBM KLCI formed a bullish engulfing candlestick which indicates a fight back of the bulls after being suppressed in the negative territory for almost a whole day, and the price action also indicated the powerful hidden strong-hand's intention to close the year in a strong positive note.
MACD continued to climb higher and its histogram also expanded after contracting for five consecutive sessions, indicating a pickup in to bullish momentum. RSI (14) was higher at 74.6, indicating a very bullish or overbought state of the FBM KLCI. Stochastic was higher at 94.5 from 93.1, indicating further strengthening of the market strength, and continuation of the up cycle. Readings from the indicators showed that the FBM KLCI is in a very bullish or overbought state, and a pullback might be expected ahead.
The trend of the FBM KLCI is up and bullish as the key index is currently at its all-time-high level, and the upward momentum might send it higher into the uncharted territory with an immediate resistance level at 1,694, 1699 and 1704. Nevertheless, as the FBM KLCI has been pushed up artificially in the last minute, the rise may not sustain, and a pullback correction is likely to happen to neutralise the overbought situation before it runs higher to test the 1700-point psychological resistance level.
On Monday, the Dow gained +166.03 points or +1.28% to close year 2012 at 13,104.14. Today, the FBM KLCI is likely to trade within a range of 1,663 to 1,704
This week's expected range: 1638 – 1713
Today’s expected range: 1663 – 1704
Resistance: 1694, 1699, 1704
Support: 1663, 1668, 1678