Stocks on Bursa Malaysia closed higher yesterday in brisk trading activity, lifted by gains in blue-chips and plantation counters with PATIMAS and MISC hogging the limelight. The local bourse rebounded yesterday following the better than expected US jobs data released last Friday as well as positive growth in China’s purchasing managers’ index (PMI) for the non-manufacturing sector. The FBM KLCI ended 7.0 points or 0.43% higher at 1,634.55, after opening at 1,634.54 and hovered between 1,630.69 and 1,639.58. Losers led gainers by 405 to 285, while 338 counters were unchanged. Volume rose to 1.355 billion shares valued at RM1.739 billion from last Thursday's 1.074 billion shares valued at RM2.013 billion.
Taking cue from the strong performance of Wall Street last Friday, the FBM KLCI opened yesterday with an upside gap of 6.99 points at 1,634.54 and surged to the intra-day high of 1,639.58 within the first fifteen minutes after opening. The key index then slipped lower from the intra-day peak on heavy profit-taking activity to hit the intra-day low of 1,630.69 before rebounding on last minute buying. Chart-wise, the FBM KLCI formed a Doji candlestick which indicates buyers and sellers were almost equal in strength for the day, and uncertainty of market direction despite chalking up gains. Hence, the FBM KLCI is likely to remain in range-bound consolidation within a range of 1,622 to 1,647.
MACD continued to slide lower, but its histogram further contracted upward, indicating continued reduction in the downward momentum and a state of consolidation. RSI (14) hooked upward to 37.5 from 31.9, reflecting the rebound in the FBM KLCI and the short term relative strength has improved but still in the bearish zone. Stochastic slipped marginally lower to 30.4 from 31.3, indicating a weak market strength and continuation of the consolidation mode. Readings from the indicators showed that the FBM KLCI is still generally bearish but the downward momentum is gradually waning and have move into a sideways consolidation mode.
The short and medium term trend of the FBM KLCI remained down, while the long term trend is still up. Nonetheless, the immediate short term trend has turned sideways as the index is now sandwiched between the 5 and 10-day SMA, and the FBM KLCI is likely to stay range-bound with immediate overhead resistance zone at 1,639 to 1,647 and a downside support zone at 1,630 to 1,622. Volume is likely to remain lukewarm as most players stayed on the sidelines with lower liners dominating the active scene.
Overnight, the Dow fell 129.71 points or -0.93% to close at 13,880.08. Today, the FBM KLCI is likely to trade within a range of 1,621 to 1,648.
This week's expected range: 1578 – 1679
Today’s expected range: 1621 – 1648
Resistance: 1639, 1644, 1648
Support: 1621, 1626, 1630