Stocks on Bursa Malaysia rebounded from recent losses to close higher yesterday on renewed buying interest with gains mostly seen in finance and selected blue-chips. Monday's sell-off came as investors fretted over the European Union’s proposed terms for a US$13 billion bailout for the island nation of Cyprus. However, most of the global bourses recovered some of the losses yesterday after the Cypriot authorities delayed a parliamentary vote on the plan and ordered the country’s banks to remain closed until Thursday. The FBM KLCI ended 4.1 points or 0.25% better at 1,625.46 after hovering between 1,619.71 and 1,628.26. Gainers thumped losers by 380 to 265, while 302 counters were unchanged. Total volume slipped to 762.687 million shares valued at RM1.445 billion from Monday’s 776.94 million shares worth RM1.489 billion.
The FBM KLCI opened 0.07 of a point higher at 1,621.43 but dipped to the intra-day low of 1,619.71 within the first five minutes of trading, and the key index rebounded from there to climb higher to touch the intra-day high of 1,628.26 at mid morning before pulling back to move sideways for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates a fight back by the bulls after being beaten consecutively for five sessions. However, the gain is more likely a technical rebound which could be short-lived. Immediate strong overhead zone is expected at 1,630 to 1,650, while the immediate downside support zone is at 1,619 to 1,613.
MACD slid lower and has crossed below the zero-line, giving out another sell signal after the dead-cross on Monday, indicating the FBM KLCI has turned bearish for the medium term. RSI (14) hooked upward to 41.4 from 38.1, reflecting the mild rebound, but the key index is still generally bearish. Stochastic slipped lower to 16.9 from 24.2, indicating the key index has entered the short term oversold zone. Readings from the indicators showed that the FBM KLCI is bearish and is a little oversold for the short term and a rebound might be expected.
The trend of the FBM KLCI remained down, and yesterday's gain was merely a technical rebound in a downtrend which could be short-lived. The FBM KLCI has again closed above the 240-day SMA which indicates there are supports coming in at current level from the long term investors. However, a trend reversal could only be confirmed if the key index is able to close above the 1,665-point level. For the time being, the FBM KLCI is likely to move range-bound within a range of 1,613 to 1,665.
Overnight, the Dow rose 3.76 points or +0.03% to close at 14,455.82. Today, the FBM KLCI is likely to trade within a range of 1,610 to 1,638.
This week's expected range: 1578 – 1676
Today’s expected range: 1610 – 1638
Resistance: 1630, 1634, 1638
Support: 1610, 1615, 1620
Stocks to watch: ALAM, BOILERM, CCM, KEURO, MUHIBAH, TAMBUN