Stocks on Bursa Malaysia extended its gains for the third day consecutively and closed higher driven by the bullish regional bourses on positive economic data emerging from the US. The FBM KLCI rose by 14.74 points or 0.89% to close at 1,667.57, its highest since mid-January, helped by gains in heavyweights. Advancers led decliners by 418 to 270, with 336 counters unchanged. Turnover increased to 989.974 million shares worth RM2.246 billion from 822.262 million shares worth RM1.948 billion on Tuesday.
Taking cue from the strong overnight performance of Wall Street, the FBM KLCI opened with an upside gap of 2.55 points at 1,655.38 and climbed higher to hit the intra-day high of 1,669.85 at late morning, and the key index pulled back to consolidate and moved sideways for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates strong buying enthusiasm and the bulls were in control for the day. Hence, the FBM KLCI is likely to continue its upward momentum to move higher. Immediate overhead resistance is expected at 1,675-point level, the 76.4% Fibonacci retracement level measuring from the pivot high of 1,699.68 to the pivot low of 1,597.
MACD continued to move higher into the positive zone above the zero-line, and its histogram also extended upward, indicating a continued build up of the bullish momentum. RSI (14) was higher at 65.6 from 59.3, indicating the key index has turned bullish for the short term. Stochastic was higher at 78.1 from 54, indicating a strong market and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI has turned bullish and strong for the short term, and the bullish upward momentum is likely to send the key index higher.
The trend of the FBM KLCI has turned up as the key index is closing above all the moving averages, and the index has breakout from the top resistance level of the short term sideways range of 1,613 to 1,664. Hence, the FBM KLCI is likely to continue the current short term uptrend to move higher. However, as the current position is still within the bigger sideways range of 1,699 to 1,597, the current uptrend could turn out to be just the C-wave part of an A-B-C corrective wave within a sideways complex until a confirm breakout above the pivot high of 1,699.68 is observed.
Overnight, the Dow fell 33.49 points or -0.23% to close at 14,526.16. Today, the FBM KLCI is likely to trade within a range of 1,644 to 1,684.
This week's expected range: 1595 – 1684
Today’s expected range: 1644 – 1684
Resistance: 1673, 1678, 1684
Support: 1644, 1649, 1658
Stocks to watch: AZRB, MAYBULK, RSAWIT, TDM, UOADEV