Stocks on Bursa Malaysia ended firmer yesterday on buying support, following Wall Street’s record close and firmer regional sentiment. Major US stock indices gained 0.9% and 1.3% overnight, with the bellwether Dow Jones Industrial Average (DJIA) closing at a new record high. The FBM KLCI rose 9.76 points or 0.59% to end at 1,651.84 after opening at 1,641.29 and hovered between 1,641.29 and 1,652.84 throughout the day. Advancers led decliners by 501 to 231, with 299 counters unchanged. Total volume rose to 1.133 billion shares valued at RM1.741 billion from 966.731 million shares valued at RM1.797 billion on Tuesday.
The FBM KLCI opened 0.79 point lower at 1,641.29 but rebounded to move higher gradually for the rest of the day to hit the intra-day high of 1,652.84 before pulling back slightly to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were in control for the day in pushing the key index higher. Hence, the FBM KLCI is likely to move higher today to challenge the next resistance level at 1,660, the 61.8% Fibonacci retracement level measuring from the record high level to the pivot low level of 1,597.
MACD and its histogram continued to climb higher, indicating continued increased in the upward momentum, and the MACD is now approaching the zero-line. A crossover of the zero-line would indicates the FBM KLCI has turned bullish for the medium term. RSI (14) was higher at 61.7 from 55.9, indicating the FBM KLCI has turned bullish. Stochastic was higher at 94.9 from 92.7, indicating a very strong market strength and continuation of the short term up cycle. Nevertheless, it has gone into the overbought zone, and some profit-taking correction might be expected ahead. Readings from the indicators showed that the FBM KLCI has turned bullish and is likely to move higher on follow through momentum.
The trend of the FBM KLCI has again turned up and bullish after turning bearish on January 21st, as the key index has now closed above all the short, medium and long term moving averages, and the follow through buying momentum may push the key index higher to the next resistance zone of 1,660 to 1,675 resistance zone.
Overnight, the Dow rose 42.47 points or +0.30% to close at 14,296.24. Today, the FBM KLCI is likely to trade within a range of 1,633 to 1,664
This week's expected range: 1604 – 1661
Today’s expected range: 1633 – 1664
Resistance: 1656, 1660, 1664
Support: 1633, 1637, 1644