Stocks on Bursa Malaysia closed easier in quiet trading last Friday on mild profit taking activity but the composite index managed to stay above the 1,800-points level. The market sentiment turned mildly bearish in line with weak key regional markets, led by Japan. The FBM KLCI ended at 1,807.61, down 0.81 points or 0.04%, with losses in CIMB dragging the composite index by 1.511 points. The barometer index moved between 1,804.98 and 1,811.65 points throughout the day. On weekly basis, the FBM KLCI gained 9.87 points higher from previous Friday's 1,797.74 points. Losers thumped gainers by 443 to 303, with 323 counters unchanged. Turnover rose to 1.119 billion shares, valued RM1.623 billion from Thursday's 1.37 billion shares, worth RM1.86 billion. Weekly turnover fell to 6.832 billion shares worth RM9.501 billion from previous week's 7.518 billion shares valued at RM11.102 billion.
Last week was a record making week for the FBM KLCI where it opened last Monday 1.39 points higher at 1,799.13 and climbed to the intra-day high of 1,803.31 before profit-taking activity sent it to close 0.06 of a point lower at 1,797.68 against a stable regional market. Tuesday saw the FBM KLCI opened higher with a big upside gap of 9.52 points at 1,807.20 but slipped lower from the intra-day high on heavy profit-taking activity to touch the intra-day low of 1,801.83 before rebounding to close 7.63 points higher at a fresh all-time high of 1,805.31. The FBM KLCI opened 1.08 points lower at 1,804.23 on Wednesday and rebounded to close at a fresh all-time-high for the second consecutive day at 1,810.00. Thursday saw the benchmark index fell 1.58 points to 1,808.42 after touching an intra-day high of 1,811.57, and the profit-taking mood continued into Friday to end the week at 1,807.61 with a weekly gain of 9.87 points.
On the weekly chart, the FBM KLCI formed a bullish white candlestick which continued the uptrend from the previous two weeks. However, the size of the candlestick body has slightly reduced, indicating a slight reduction in the upward momentum, but the uptrend remained intact. On the daily chart, the FBM KLCI pulled back from its intra-day high of 1,811.65 to close near the opening level to form a white inverted hammer candlestick, indicating heavy profit-taking activity during the day, and the candlestick formed on Friday also served to confirm the dark-cloud-cover reversal pattern formed on Thursday. Hence, the FBM KLCI is likely to consolidate in the coming week. Immediate overhead resistance zone is at 1,811 to 1,826, while the downside support zone is at 1,806 to 1,801.
Weekly MACD and it histogram was higher, indicating a continued increase in the weekly momentum. Daily MACD was higher but showed sign of tapering off, while its histogram contracted for the second consecutive day, indicating a reduction of momentum on the daily perspective. Weekly RSI (14) was higher at 72.8 from 71.3, indicating a very bullish or overbought state of the key index. Daily RSI (14) slipped lower to 68.1 from 68.9, reflecting a mild pullback correction, and the key index is still in a bullish state. Weekly Stochastic continued to rise to 79.3 from 74.2, indicating a pickup in the weekly market strength and continuation of the weekly up cycle. Daily Stochastic, however, hooked downward to 94.4 from 95.8, reflecting a pullback correction. Readings from the weekly and daily indicators generally showed that the FBM KLCI is in a bullish state but is a little overbought, and hence, is likely to pause for a consolidation before picking strength to move higher.
The trend of the FBM KLCI remained up and bullish as it continued to stay above all the moving averages and is at the all-time high level. Nevertheless, the candlestick formation on Thursday and Friday showed that profit-taking activity will cap the index for the moment, but as the underlying trend is still strong, the FBM KLCI is likely to move higher after the profit-taking correction phase is over, hence, the correction actually offer an opportunity to buy on dip for quality shares.
Last Friday, the Dow rose a marginal +3.22 points or +0.02% to close at 15,558.83. This week, the FBM KLCI is likely to trade within a range of 1,785 to 1,826, and today, the FBM KLCI is likely to trade within a range of 1,797 to 1,818.
This week's expected range: 1785 – 1826
Today’s expected range: 1797 – 1818
Resistance: 1811, 1815, 1818
Support: 1797, 1801, 1804
Stocks to watch: BRAHIMS, IDMENSN, MAHSING, MAYBULK, MTOUCHE, UOADEV.