Stocks on Bursa Malaysia closed firmer yesterday, staging a technical rebound from its recent losses, in line with regional bourses, as concerns over the geopolitical tension in Syria and rising crude oil price subsided. The FBM KLCI rose 17.61 points, or 1.04%, to close at 1,703.78 after opening 0.66 point easier at 1,685.51, and the key index moved between 1,684.08 and 1,707.19 throughout the day. Gainers trounced losers by 678 to 182, with 245 counters unchanged. Turnover stood at 1.852 billion shares worth RM2.260 billion against Wednesday's 2.242 billion shares worth RM3.373 billion.
The FBM KLCI opened 0.66 point lower at 1,685.17 and slipped to the intra-day low of 1,684.08 within the first five minutes after opening. The key index rebounded from the low and climbed higher for the rest of the day, it hit the intra-day high of 1,707.19 just before closing, but ended the day off high. Chart-wise, the FBM KLCI formed a bullish long white candlestick which indicates the bulls or buyers were in control for the day. The formation of the candlestick also served to confirm the bottom reversal signal issued by the black hammer candlestick formed a day earlier. Hence, the FBM KLCI is likely to continue its rebound to move higher today. Immediate overhead resistance zone is at 1,707 to 1,719, while the downside support zone is at 1,684 to 1,660.
MACD continued to slide lower, but its histogram contracted upward for the first time after expanding southward for eight consecutive sessions, indicating a reduction in the bearish momentum. RSI (14) hooked upward strongly to 29.3 from 18.4, reflecting a strong rebound, and the key index has moved out of the extremely bearish state to the very bearish state. Stochastic was higher at 18.6 from 12.1, and has made a golden-cross over the slow stochastic line, issuing a buy signal. Readings from the indicators showed that the FBM KLCI is staging a technical rebound after hitting the seriously oversold zone a day earlier.
With the bullish up move yesterday, the gap formed a day earlier was closed which indicates the exhaustion of the bears, and a temporary bottom was seen at 1,660.39. Nevertheless, the trend of the FBM KLCI remained down as the key index continued to stay below most of the short, medium and long term moving averages. In order to reverse the current down trend, the FBM KLCI must at least close above 1,731, the mid range of the current downtrend range from 1,801.26 to 1,660.39, which coincided with the 10-day SMA currently at 1,731. As the trend is not fully reverse yet, the potential of re-testing the recent low is still there.
Overnight, the Dow rose +16.44 points or +0.11% to close at 14,840.95. Today, the FBM KLCI is likely to trade within a range of 1,666 to 1,730.
This week's expected range: 1661 – 1818
Today’s expected range: 1666 – 1730
Resistance: 1712, 1721, 1730
Support: 1666, 1675, 1689
Stocks to watch: ALAM, LBS, LBS-WA, MHB, MUHIBAH, PERDANA, SUPERMX