Stocks on Bursa Malaysia which received a late boost from the banking counters, managed to close in positive territory last Friday. The FBM KLCI rose by 0.02 point to close at 1,706.28 after opening 0.56 points higher at 1,706.82 and hovered between 1,702.60 and 1,710.43. On a weekly basis, the benchmark index rose 7.75 points from previous Friday's 1,698.53. Losers thumped gainers by 398 to 269, with 327 counters unchanged. Volume slipped to 776.416 million shares worth RM1.497 billion from Thursday's 779.791 million shares worth RM1.667 billion. Weekly turnover declined to 4.187 billion shares, worth RM8.264 billion, from previous week’s 5.535 billion shares valued at RM9.124 billion.
The FBM KLCI was basically in a sideways range-bound mode last week where the key index opened last Monday 0.37 of a point lower at 1,698.16 and closed 0.76 of a point lower to end the day at 1,697.77 after fluctuating within a narrow range of 1,696.95 and 1,702.88 throughout the day. The local bourse opened lower on Tuesday due to subdued global sentiment in the aftermath of the Boston Marathon bombing, which led to a sell-off especially on the overnight Wall Street, coupled with the disappointing economic growth in China, the FBM KLCI opened 2.75 points lower at 1,695.78 and slipped lower to the intra-day low of 1,688.70 before rebounding to close 2.76 points higher at 1,700.53. Boosted by persistent buying of blue-chips and heavyweight counters, the FBM KLCI rose 10.44 points end at 1,710.97, a fresh record high closing on Wednesday. However, Thursday and Friday saw continued profit-taking ahead of the GE13 nomination day on Saturday.
On the weekly chart, the FBM KLCI formed a white spinning-top candlestick which indicates uncertainty amid consolidation. Hence, the benchmark index is likely to consolidate in the coming week. On the daily chart, the FBM KLCI formed a black spinning-top candlestick which also indicates uncertainty amid consolidation. Hence, from both the weekly and daily chart, the FBM KLCI is likely to further consolidate itself with 1,700 being the critical psychological support level and the all-time intra-day high of 1,716 being the top resistance level.
Weekly MACD and its histogram continued to climb higher, indicating a continued improvement of the weekly momentum. However, daily MACD and its histogram was lower, indicating a further loss in the index's daily momentum. Weekly RSI (14) was higher at 64.5, indicating a further improvement of the weekly relative strength. However, daily RSI (14) was flat at 69.2, both weekly and daily RSI readings showed that the key index is in the bullish zone. Weekly stochastic was higher at 88.3, and the daily stochastic was also higher at 89.7, indicating a strong market strength. Readings from the weekly indicators showed that the FBM KLCI is in a bullish mode with strong upward momentum. However, the daily indicators showed a consolidation mode on the benchmark index.
The trend of the FBM KLCI is up and bullish as the key index is staying at record high level on the weekly chart. However, after three consecutive weeks of running up from the low of 1,628 to the all-time high of 1,716.47, the FBM KLCI has shown sign of consolidation as the key index did not chart any new high last week and was merely trading within previous week's range, and the appearance of a white spinning-top candlestick on the weekly chart further strengthen this observation, and hence, the FBM KLCI is likely to go into a consolidation mode this week with a downward bias. Immediate downside support zone is at 1,702 to 1,688 while the overhead resistance zone is at 1,710 to 1,716.
Last Friday, the Dow rose +10.37 points or +0.07% to close at 14,547.51. This week, the FBM KLCI is likely to trade within a range of 1,669 to 1,735, and today, the FBM KLCI is likely to trade within a range of 1,694 to 1,718.
This week's expected range: 1669 – 1735
Today’s expected range: 1694 – 1718
Resistance: 1710, 1714, 1718
Support: 1694, 1698, 1702