Stocks on Bursa Malaysia maintained its bullish trend to close higher yesterday, prompted by continued buying interest in selected blue-chips and heavyweights. Asian markets were also trading mostly higher on hopes of a global recovery. The FBM KLCI finished 1.58 points or 0.09% higher at 1,694.16, after hovering between 1,692.97 and 1,697.37 throughout the day. Gainers led losers by 509 to 252, with 334 counters unchanged. Total volume increased to 1.203 billion units, valued at RM1.604 billion, compared with last Friday’s 1.256 billion shares worth RM1.688 billion.
The FBM KLCI opened 0.39 point higher at 1,692.97 but slipped to the intra-day low of 1,691.34 within the first fifteen minutes of trading. It rebounded to hit the intra-day high of 1,697.37 at mid morning before sliding on profit-taking activity for the rest of the day. However, a last minute buying of selected blue-chips managed to lift the key index to close off low. Chart-wise, the FBM KLCI formed a white spinning-top like candlestick with a slightly longer upper shadow which indicates uncertainty in market direction and the surfacing of distribution. Hence, the FBM KLCI is likely to take a breather to consolidate itself with immediate downside support zone at 1,691 to 1,687 while the overhead resistance zone is at 1,697 to 1,699.
MACD continued to climb higher, but its histogram further contracted, indicating a lack of upward momentum or weakness is developing. RSI (14) was marginally higher at 69.8 from 68.3, reflecting the mild gain in the key index, and the index is still in the bullish zone but showed sign of losing momentum. Stochastic hooked upward to 92.1 from 85.8 and has crossed above the slow stochastic line reflecting the mild rebound, but the criss-cross of the stochastic and the slow stochastic line showed that the index is moving into a consolidation mode. Readings from the indicators showed that the FBM KLCI is losing its upward momentum, and a correction is imminent.
The trend of the FBM KLCI remained up and bullish. However, signs are there that the key index is facing heavy resistance at current level from distribution and is losing its upward momentum. Hence, the FBM KLCI is likely to stage a pullback correction to neutralize its short term overbought situation first before another big up move which is likely to push the index through the psychological barrier of 1,700.
Overnight, the Dow fell -50.92 points or -0.38% to close at 13,384.29. Today, the FBM KLCI is likely to trade within a range of 1,685 to 1,703.
This week's expected range: 1651 – 1725
Today’s expected range: 1685 – 1703
Resistance: 1697, 1700, 1703
Support: 1685, 1688, 1691