Stocks on Bursa Malaysia ended higher last Friday on mild bargain hunting interest ahead of the weekend break. The FBM KLCI rose 4.69 points or 0.26% to end at 1,782.51 after moving between 1,777.84 and 1,787.83 throughout the day. However, on a weekly basis, the FBM KLCI ended 25.10 points lower against previous Friday's 1,807.61 points. Market breadth was positive with gainers led losers by 400 to 315, and 321 were unchanged. Market volume fell to 1.229 billion shares valued at RM1.844 billion from 1.458 billion shares valued at RM2.129 billion on Thursday. Weekly turnover increased to 7.958 billion shares valued at RM10.87 billion from previous week's 6.832 billion shares worth RM9.501 billion.
The FBM KLCI suffered a sell-off last week, it opened last Monday 0.23 of a point lower at 1,807.38 and fell by 8.83 points to close the day at 1,798.78 on weak buying momentum amid external volatility. The FBM KLCI ended 3.7 points lower at 1,795.08 on Tuesday ahead of the US Federal Reserve (Fed) decisions and important statement by Fed chairman Ben Bernanke. Wednesday saw the benchmark FBM KLCI fell 22.46 points or 1.25% to end at 1,772.62 after Fitch Ratings revised its outlook for Malaysian public debt to “negative” from “stable”. The key index rebounded on Thursday to finish 5.20 points higher at 1,777.82 after hitting the intra-week low of 1,766.70, and the rebound continued into Friday with a further gain of 4.69 points to end the week at 1,782.51.
On the weekly chart, the FBM KLCI formed a bearish long black candlestick which mark the reversal of a five weeks uptrend, and hence, the key index is likely to further consolidate in this coming holiday-shortened week. On the daily chart, the FBM KLCI formed a second white spinning-top candlestick which indicates uncertainty of market direction amid a technical rebound, and the key index is likely to stay in a consolidation mode today. Immediate overhead resistance zone is at 1,787 to 1,791, while the immediate downside support zone is at 1,777 to 1,766.
Weekly MACD has hooked downward but is still above the weekly signal line, and its histogram also contracted substantially, indicating a drastic loss in the weekly momentum. Daily MACD and its histogram continued to slide lower, indicating a further loss in the daily momentum. Weekly RSI (14) dropped to 63.5 from overbought level of 72.9, indicating a strong pulled back in the key index which reduced the weekly relative strength to the bullish zone. Daily RSI (14), however, rebounded to 49 from 46.1, indicating a technical rebound. Weekly Stochastic hooked downward slightly to 78.5 from 79.4 but is still above the slow stochastic line, indicating a pullback but the weekly cycle is still up. Daily Stochastic, however, slide lower to 22.2 from 26.2, indicating a weak market strength and the daily cycle is still down. Readings from the weekly indicators showed that the FBM KLCI is undergoing a mild technical pullback on the weekly perspective, while the daily indicators showed that the key index is mildly bearish and is likely to further consolidate as the daily MACD and stochastic showed no sign of a reversal.
The short term trend of the FBM KLCI remained down as the key index continued to stay below the short term 5, 10 and 20-day SMA. Nevertheless, the medium and longer term trend is still up. For this coming holiday-shortened week ahead of the Hari Raya Puasa before the weekend with only two and a half day of trading, the FBM KLCI is likely to stay in a range-bound consolidation mode.
Last Friday, the Dow rose +30.34 points or +0.19% to close at 15,658.36. This week, the FBM KLCI is likely to trade within a range of 1,744 to 1,827, and today, the FBM KLCI is likely to trade within a range of 1,767 to 1,797.
This week's expected range: 1744 – 1827
Today’s expected range: 1767 – 1797
Resistance: 1787, 1792, 1797
Support: 1767, 1772, 1777
Stocks to watch: CUSCAPI, HOHUP, IJACOBS, PRTASCO, SUMATEC