Stocks on Bursa Malaysia ended higher yesterday on sustained buying in selected heavyweights ahead of Bank Negara Malaysia's Monetary Policy Committee meeting later of the day. The local market also moved in line with regional markets after US Federal Reserve chairman Ben Bernanke promised to continue to stimulate the US economy. The FBM KLCI rose 12.44 points or 0.7% to close at 1,781.15, after opening 7.84 points better at 1,776.55. The benchmark index hovered between 1,776.55 and 1,781.86 throughout the day. Market breadth was positive, with 460 gainers and 313 losers, while 302 counters were unchanged. Turnover decreased to 1.21 billion shares worth RM1.90 billion from 1.22 billion shares valued at RM1.70 billion on Wednesday.
The FBM KLCI opened with a big upside gap of 7.84 points at 1,776.55, the intra-day low, and surged to the intra-day high of 1,781.86 within the first five minutes of trading, and the key index pulled back on profit-taking to move sideways range-bound for the rest of the day before a last minute buying which propped up the index to close near the day's high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day, and hence, the FBM KLCI is likely to continue its upward momentum to move higher today. Immediate overhead resistance is at 1,782 follows by 1,792 and 1,795, while the downside support is at 1,776.
MACD and its histogram turned upward strongly, indicating a pickup in the index's momentum. RSI (14) was higher at 58.1 from 52.6, indicating an improvement in the short term relative strength to the mildly bullish state from a neutral state. Stochastic hooked upward to 86.1 from 75, and has made a golden-crossed above the slow stochastic line, issuing a buy signal. Signals from the indicators showed that the FBM KLCI has shown signs of turning bullish, and is likely to continue its upward momentum to move higher.
The immediate short term trend of the FBM KLCI has turned up as the index has broken above its immediate horizontal resistance of 1,779. At the same time, it also break through the upper resistance of the short term downtrend channel, signifying an attempt to break out from the sideways range-bound consolidation mode. Nevertheless, a confirmed breakout is only achieved when the key index is able to close above the 1,795-point level, and good follow through buying momentum with volume is needed for this to happen. The longer term uptrend is still intact.
Overnight, the Dow rose 169.26 points or +1.11% to close at a new record high of 15,460.92. Today, the FBM KLCI is likely to trade within a range of 1,772 to 1,787.
This week's expected range: 1755 – 1790
Today’s expected range: 1772 – 1787
Resistance: 1783, 1785, 1787
Support: 1772, 1774, 1777
Stocks to watch: CLIQ-WA, KUB, LBS, PENERGY, PERDANA, PRTASCO, SCOMIES, SUMATEC, TEXCHEM, WILLOW