Stocks on Bursa Malaysia closed generally higher yesterday with the FBM KLCI continued its upward momentum to close at an all-time-high, for the second consecutive day, at 1,810.00, up 4.69 points or 0.26% after opening 1.08 points lower at 1,804.23. The benchmark index, spurred by foreign institutional buying, moved between 1,804.23 and 1,810.71 throughout the day. The firmer trend was due to inflow of foreign funds on growing investor optimism after Japanese Prime Minister Shinzo Abe's ruling coalition managed to security a majority in both houses of parliament. The victory spurred positive sentiment regionally with the markets expected to see prolonged stimulus programmes which will boost Japan's economy in the near term. Gainers outnumbered losers by 392 to 356, with 347 counters unchanged. Turnover rose to 1.541 billion shares worth RM1.941 billion from 1.424 billion shares worth RM2.252 billion on Tuesday.
The FBM KLCI opened 1.08 points lower at 1,804.23 and rebounded to hit the morning session high of 1,810.60 within twenty five minutes of trading. The key index pulled back on heavy profit-taking, but managed to find intra-day support at 1,806.44, and rebounded to move gradually higher within a narrow trading range for the rest of the day to hit the intra-day high of 1,810.71 before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish white Marubozu-like candlestick which indicates the bulls or buyers were in full control for the day in pushing the key index higher. Hence, the FBM KLCI is likely to climb higher today if the buying momentum continues. Immediate overhead resistance is expected at 1,812, follow by 1,815 and 1,818, while the downside support zone is at 1,804 to 1,801.
MACD and its histogram continued to climb higher, indicating a continued increase in the upward momentum. RSI (14) was higher at 70.3 from 68.5, indicating the FBM KLCI is turning very bullish, or has entered the overbought zone for the first time after falling below this level on May 16. Stochastic hooked upward to 93.7 and has crossed above the slow stochastic line, giving out a buy signal, and indicated that the market strength is again turning strong. Readings from the indicators showed that the FBM KLCI is getting very bullish and has entered the short term overbought zone. Hence, is likely to move higher but with more profit-taking activity coming in along the way.
The trend of the FBM KLCI remained up and bullish as the key index continued to chart new record high. With the uptrend remained intact, the FBM KLCI is likely to move higher to challenge the record intra-day high of 1,826.22 in the short term. However, as the key index continued to move higher, the trading of the second and third liners has turned cautious in anticipation of a correction on the FBM KLCI.
Overnight, the Dow fell 25.50 points or -0.16% to close at 15,542.24. Today, the FBM KLCI is likely to trade within a range of 1,799 to 1,818.
This week's expected range: 1745 – 1811
Today’s expected range: 1799 – 1818
Resistance: 1812, 1815, 1818
Support: 1799, 1801, 1805
Stocks to watch: BRAHIMS, FITTERS, GOCEAN, GBGAQRS, MHB, MTOUCHE, NOTION, REDTONE, SUMATEC