Stocks on Bursa Malaysia closed broadly higher at a two-week high yesterday, boosted by persistent buying support, especially in blue-chips and plantation heavyweights. The benchmark FBM KLCI rose 12.21 points or 0.69% to 1,787.8 after hovering between 1,780.17 and 1,792.67 throughout the day. Market breadth was positive as gainers thumped losers by 667 to 224, with 233 counters unchanged. Volume rose to 2.417 billion units valued at RM2.532 billion from Friday's 1.58 billion units valued at RM2.09 billion.
Taking cue from the strong rebound on Wall Street last Friday, the FBM KLCI opened higher with an upside gap of 4.58 points at 1,780.17 and climbed higher to the intra-day high of 1,792.67 before pulling back to close off high on mild profit-taking. Chart-wise, the FBM KLCI formed a bullish white candlestick which breaks away from the previous candlestick, indicating an influx of fresh buying interest after consolidating in a narrow range last week. Hence, the FBM KLCI is likely to continue its upward momentum to move higher today. Immediate overhead resistance zone is at 1,792 to 1,795 while the downside support is at 1,765.
MACD has turned up but is still below the signal-line, while its histogram has contracted strongly upward, indicating a possible change in the momentum from down to up. RSI (14) climbed higher to 62.4 from 57.6, indicating the short term relative strength of the FM KLCI has again turned bullish from a mildly bullish state. Stochastic hooked upward strongly to 41.4 from 26.9 and has crossed over the slow stochastic line, indicating a possible beginning of a short term up cycle. Signals from the indicators showed that the FBM KLCI has started to show strength after two weeks of consolidation, and hence, is likely to move higher.
With the strong upward move yesterday, the short term trend of the FBM KLCI has turned from sideways to up as the immediate short term 5-day SMA has crossed above the 10-day SMA, and the index is also closing above all the moving averages, and the medium to longer term uptrend is still intact. From a bigger picture, the FBM KLCI is still currently trapped within a sideways range of 1,765 to 1,795, and has formed a triangle chart pattern, and yesterday's up move has seen the key index breaking out of this triangle chart pattern, and a further break of the 1,795 resistance will see the index moving higher to test the 1,800-point psychological level.
Overnight, the Dow fell 9.53 points or -0.06% to close at 15,238.59. Today, the FBM KLCI is likely to trade within a range of 1,768 to 1,805.
This week's expected range: 1756 – 1791
Today’s expected range: 1768 – 1805
Resistance: 1793, 1799, 1805
Support: 1768, 1774, 1781
Stocks to watch: WTK, THHEAVY, TAMBUN, SYCAL, SERSOL, SCOMI, SCOMIEN, PUNCAK, PERWAJA, PERDANA, PANTECH, MKH, MASTEEL, MAHSING, KPS, JAKS, HSL, EUPE, DIGISTA, CYPARK, 3A