Stocks on Bursa Malaysia closed broadly higher yesterday with the FBM KLCI closed at a two-week high, as market players sought large caps with better values in a reporting season. On regional markets, Asian stocks posted solid gains led by Japan's Nikkei stock index on hopes for more monetary stimulus by the Japanese Government that would pull markets up elsewhere. The FBM KLCI rose 10.52 points or 0.59% to 1,795.09 after moving between 1,784.46 and 1,796.29 throughout the day. Gainers more than doubled losers by 555 to 241, with 289 counters unchanged. Total turnover firmed to 1.99 billion shares worth RM1.86 billion from 1.59 billion shares worth RM1.7 billion on Monday.
The FBM KLCI opened 0.11 of a point lower at the intra-day low of 1,784.46, and rebounded strongly to move higher. It hit the intra-day high of 1,796.29 fifty minutes after opening and pulled back to move sideways for the rest of the day. Chart-wise, the FBM KLCI formed a bullish long white candlestick which closed near the high of the day, indicating the bulls or buyers were in control for the day, and hence, the FBM KLCI is likely to continue its bullish upward momentum to move higher today. Immediate overhead resistance is pegged at 1,800, the psychological resistance level follow by 1,805 and 1,811, and downside support zone remained at 1,776 to 1,766.
MACD hooked upward for the first time after making a dead-cross on July 31st, and the histogram also contracted upward significantly, indicating an increased in the positive upward momentum and possible end of the recent correction. RSI (14) was higher at 56.8 from 50.4, indicating an improvement of the short term relative strength to a mildly bullish state from a neutral level. Stochastic turned upward strongly and so is the slow stochastic line, indicating a possible beginning of a short term bullish up cycle. Readings from the indicators showed that the FBM KLCI is showing first sign of turning bullish after three weeks of consolidation, and the upward momentum is likely to push the key index higher.
With the strong upward move yesterday, the FBM KLCI has broken out of its short term consolidation range. The short term trend also reversed up as the 5-day SMA has just made a golden-cross above the 10 and 30-day SMA, and with the key index breaking above the 20-day SMA which posted as its immediate resistance. Hence, the FBM KLCI has again turned bullish and is likely to move higher to challenge the 1,800-point psychological resistance level.
Overnight, the Dow rebounded 31.33 points or +0.20% to close at 15,451.01. Today, the FBM KLCI is likely to trade within a range of 1,775 to 1,808.
This week's expected range: 1744 – 1827
Today’s expected range: 1775 – 1808
Resistance: 1799, 1803, 1808
Support: 1775, 1780, 1787
Stocks to watch: ASUPREM, BJCORP, HIBISCS, JAKS, LBS, MALTON, MAS, MASTEEL, TDM, THHEAVY