Stocks on Bursa Malaysia ended firmer yesterday in tandem with regional markets, tracking the favourable overnight performance of US equity markets. However, there were still concerns over the political tension in Portugal and Egypt, as well as caution over key events such as today's US jobs data (Non-farm payroll) release. The FBM KLCI rose 2.13 points, or 0.12%, to close at 1,771.34. The key barometer opened 0.39 point higher at 1,769.21 and hovered between 1,768.82 and 1,774.66 throughout the day. Gainers led losers by 487 to 221 while 288 counters were unchanged. Total volume fell to 1.176 billion shares worth RM1.578 billion from 1.247 billion shares worth RM2.102 billion on Wednesday.
The FBM KLCI opened 0.39 of a point lower at 1,768.82 and moved higher from there to hit the intra-day high of 1,774.66 within the first thirty five minutes after opening. The key index slipped lower on profit-taking and moved sideways in a narrow range for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white inverted hammer candlestick, a one day bottom reversal candlestick pattern which indicates the bulls has appeared after two days of profit-taking activity which started on Tuesday. Hence, the FBM KLCI is likely to continue its rebound to move higher, or stay range-bound while waiting for fresh leads. Immediate overhead resistance zone is at 1,775 to 1,777, while the downside support is at 1,767.
MACD and its histogram continued to rise, indicating an improvement in the upward momentum. RSI (14) hooked upward slightly to 54 from 53.2, indicating a slight improvement in the index's short term relative strength, and the key index is still in a mildly bullish state. Stochastic hooked downward to 80.2 from 82.4, indicating a mild pullback correction. Readings from the indicators showed that the FBM KLCI is in a consolidation mode but is mildly bullish.
The immediate short term trend of the FBM KLCI has turned sideways. However, the medium to longer term trend is still up. From the trend channel, the FBM KLCI is still trapped within the sideways range with a downward bias where the upper boundary of the channel is at 1,787.7 and the lower boundary at 1,736.1. Rotational play on the second and liners is likely to continue as the FBM KLCI continue to consolidate.
Overnight, US market was close for their Independence Day holiday, elsewhere in Europe, the FTSE rose 191.80 points or +3.08% to close at 6,421.67. Today, the FBM KLCI is likely to trade within a range of 1,762 to 1,780.
This week's expected range: 1707 – 1807
Today’s expected range: 1762 – 1780
Resistance: 1774, 1777, 1780
Support: 1762, 1765, 1768
Stocks to watch: CCM, LBS, MHB, MUHIBAH, SCOMIES, STONE