Stocks on Bursa Malaysia closed higher yesterday, lifted by interests in the oil and gas counters, especially Petronas-linked companies. The market also took the cue from the better performances of regional bourses after the release last week of upbeat data from China which showed banks extended US$114 billion in new loans for July, beating the US$103.4 billion economists forecast. The FBM KLCI rose 5.25 points to end at 1,784.57 after moving between 1,777.87 and 1,786.2 throughout the day. Gainers led losers by 494 to 309, with 279 counters unchanged. Total turnover firmed to 1.59 billion shares worth RM1.7 billion from 981.02 million shares worth RM1.04 billion last Wednesday.
After a long break, the FBM KLCI opened 0.43 point higher at 1,779.75 and slipped to the intra-day low of 1,777.87 within the first five minutes. The key index rebounded and moved gradually higher to touch the intra-day high of 1,786.20 at mid afternoon before profit-taking activity sent it to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which reversed the losses it suffered on last Wednesday, hence, the FBM KLCI is likely to continue its rebound to move higher today. Immediate overhead resistance zone is at 1,788 to 1,791, while the downside support zone is at 1,777 to 1,766.
MACD continued to slide lower but its histogram contracted upward, indicating a reduction in the bearish momentum. RSI (14) hooked upward to 50.4 from 46.8, indicating the short term relative strength of the FBM KLCI has turned neutral from a mildly bearish state. Stochastic was marginally lower at 35.9 from 36.3, and has just touched the slow stochastic line, indicating a state of consolidation. Readings from the indicators showed that the FBM KLCI is in a state of consolidation.
The short term trend of the FBM KLCI still remained sideways range-bound as the key index continued to be trapped between the short and medium term moving averages. In order to breakout from this range-bound situation, the key index must at least close above the 20-day SMA which posted as the upper resistance at 1,792, in other words, the FBM KLCI must close the gap formed on July 31st in order to resume its bullish uptrend. On the other hand, a downside break of the immediate support at 1,776 will also see the FBM KLCI correcting deeper. Nevertheless, the long term uptrend still remained intact.
Overnight, the Dow fell a marginal 5.83 points or -0.04% to close at 15,419.68. Today, the FBM KLCI is likely to trade within a range of 1,771 to 1,794.
This week's expected range: 1744 – 1827
Today’s expected range: 1771 – 1794
Resistance: 1787, 1791, 1794
Support: 1771, 1774, 1779
Stocks to watch: CAREPLS, DAYA, DESTINI, IRCB, KARYON, PESONA, SALCON, SERSOL, SONA-WA, TEXCHEM