Stocks on Bursa Malaysia closed higher last Friday on active buying support, led by gains in the finance stocks despite losses in selected blue-chips. The barometer index, FBM KLCI added 5.99 points or 0.34% to close at 1,775.59 after moving between 1,778.68 and 1,768.29 throughout the day. Week-on-week, the key index gained 6.37 points from previous Friday's 1,769.22. Gainers led losers by 511 to 297, with 274 counters unchanged. Volume declined to 1.58 billion units valued at RM2.09 billion from 1.89 billion units valued at RM2.32 billion on Thursday.
The FBM KLCI was basically moving range-bound within a narrow range of 12.35 points the whole of last week. It opened last Monday 2.33 points higher at 1,771.55 but slipped lower to close the day 2.89 points lower at an intra-week low of 1,766.33. Taking cue from the rebound on Wall Street overnight, the FBM KLCI opened Tuesday 2.45 points higher at 1,768.78 and moved higher to close the day 10.41 points higher at an intra-day high of 1,776.74. Wednesday saw the key index retreated in the afternoon session to close 2.32 points lower at 1,774.42 after hitting an intra-day high of 1,778.64 in the morning session. The barometer index continued its weakness into Thursday and fell 4.82 points to close at 1,769.6 after a day of "see-saw" trading. Nonetheless, Friday saw a rebound of the FBM KLCI to hit the intra-week high of 1,778.68 before pulling back to close off high at 1,775.59 with a gain of 5.99 points.
On the weekly chart, the FBM KLCI formed a small white spinning-top candlestick which indicates consolidation but with an upward bias. Hence, the FBM KLCI is likely to continue to consolidate in the coming week. On the daily chart, the FBM KLCI formed a bullish white candlestick which indicates the key index rebounded and the bulls were making an attempt to move higher, the key index tested the immediate resistance of 1,778 but pulled back on mild profit-taking. Hence, the FBM KLCI is likely to continue its upward swing to move higher today. Immediate overhead resistance zone is at 1,780 to 1,795 while the immediate downside support is at 1,765.
Weekly MACD continued to rise, but its histogram continued to contract, indicating a state of consolidation. Daily MACD, however, continued to slide lower, but its histogram contracted upward, indicating a reduction in the daily bearish momentum. Weekly RSI (14) hooked upward to 71.1 from 70.2, reflecting a mild rebound and the weekly relative strength of the key index is still in the very bullish state. Daily RSI (14) hooked upward to 57.6 from 55, indicating the daily relative strength is still in the mildly bullish state. Weekly Stochastic hooked upward gently to 75.3 from 74.8, but is still below the weekly slow stochastic line, indicating a rebound. Daily Stochastic, however, hooked downward to 26.8 from 28.1, indicating the key index is still in a consolidation mode. Readings from the both the weekly and daily indicators showed that the FBM KLCI is in a state of consolidation, and is likely to continue to stay range-bound until a confirm breakout is observed.
The immediate short term trend of the FBM KLCI has turned sideways range-bound. However, the medium to longer term uptrend still remained intact. The price action of the FBM KLCI indicated that it is likely to stay sideways range-bound within an immediate range of 1,675 to 1,795. A breakout of 1,795 will see the key index moving higher to challenge the psychological resistance of 1,800 follow by the all-time high level of 1,826, and a break of the immediate support at 1,765 will see the index sliding lower to the next support level of 1,752, follow by 1,743, where 1,743 is a critical support. A break of the 1,743 will see the key index plunging lower to cover the gap formed on May 6. With volume continue to stay above the 1.5 billion shares, rotational play on the lower liners is likely to continue.
Last Friday, the Dow rose 207.50 points or +1.38% to close at 15,248.12. This week, the FBM KLCI is likely to trade within a range of 1,756 to 1,791, and today, the FBM KLCI is likely to trade within a range of 1,759 to 1,789.
This week's expected range: 1756 – 1791
Today’s expected range: 1759 – 1789
Resistance: 1780, 1784, 1789
Support: 1759, 1763, 1769
Stocks to watch: AMPROP, BAHVEST, BENALEC, FITTERS, JAKS, KUB, TAMBUN, TSH