Stocks on Bursa Malaysia closed higher across the board yesterday after the ruling Barisan Nasional retained power in the 13th General Election held on Sunday. The FBM KLCI also hit an all-time intra-day high of 1,826.22, boosted by a buying spree in heavyweight counters. The key index closed at a historic high of 1,752.02 points yesterday, up 57.25 points or 3.38% from last Friday's close after hovering between 1,743.14 and 1,826.22. Gainers led losers by 870 to 83 with 132 counters remained unchanged. Total volume almost doubled to 1.911 billion shares worth RM4.993 billion from Friday's 933.243 million shares worth RM2.315 billion.
The FBM KLCI opened with a huge upside gap of 76.85 points at 1,771.62 and surged to the fresh all-time intra-day high of 1,826.22, rising 131.45 points, within the first five minutes of trading. The key index slipped lower from the intra-day high on heavy profit-taking to touch the intra-day low of 1,743.14 before rebounding to close off low at 1,752.02. Chart-wise, the FBM KLCI formed a bearish black inverted hammer candlestick in a shooting star position, a top reversal candlestick pattern which indicates heavy profit-taking activity amid strong buying interest. Hence, the FBM KLCI is likely to correct downward to consolidate itself and to close the huge gap before running up to re-test the high. Immediate downside support is pegged at 1,718, the previous historical high level.
MACD hooked upward strongly and made a golden-cross above the signal-line, issuing a buy signal. RSI (14) also hooked upward strongly to 71.7 from previous reading of 50.9, indicating the key index has turned bullish from a neutral position. On the contrary, Stochastic fell lower to 49.5 from 68.2, indicating the index might further consolidate. Mixed readings from the indicators showed that the FBM KLCI is bullish but with a potential of correction.
The trend of the FBM KLCI is up and bullish. Nevertheless, as the index has shot up too much in too short a time, it is likely to attract more profit-taking activity. However, after the profit-taking activity is over, the FBM KLCI is likely to run up to re-test the all-time high of 1,826.
Overnight, the DJIA fell 5.07 points or -0.03% to close at 14,968.89. Today, the FBM KLCI is likely to trade within a range of 1,718 to 1,785.
This week's expected range: 1647 – 1751
Today’s expected range: 1718 – 1785
Resistance: 1760, 1771, 1785
Support: 1718, 1730, 1740