Stocks on Bursa Malaysia closed mixed last Friday off their intra-day low with the benchmark FBMKLCI making a gain of 5.12 points or 0.28% to 1,812.72 after hovering between 1,804.27 and 1,812.72 during the entire trading session. On a weekly basis, the FBMKLCI rose 18.2 points or 1.01% from previous Friday’s 1,794.52. Losers led gainers by 402 to 347 with 315 counters unchanged. Total turnover declined to 1.19 billion shares worth RM1.52 billion from 1.28 billion shares worth RM1.35 billion on Thursday. Weekly total turnover rose to 7.85 billion shares, worth RM9.46 billion, from last week's 6.172 billion shares worth RM6.707 billion.
Bursa Malaysia stocks was mostly in a range-bound consolidation last week in line with the cautious regional tone due to the United States Thanksgiving holiday last Thursday, and Standard & Poor's cutting its credit outlook on four major Malaysian financial institutions to negative from stable also contributed to the cautious market undertone. The FBMKLCI opened last Monday higher with an upside gap of 2.77 points at 1,797.29, and rallied to the intra-day high of 1,806.13 before ending the day 3.45 points higher at 1,797.97. The key index stayed in consolidation mode on Tuesday with a marginal gain of 0.16 point at 1,798.13 after hovering between 1,796.25 and 1,802.78. Wednesday saw the FBMKLCI opened lower with a downside gap of 3.11 points at 1,795.02 and slipped to the intra-week low of 1,792.21 before rebounding to close 0.33 point higher at 1,798.46. The FBMKLCI staged a breakout from its consolidation on Thursday to close 9.14 points higher at 1,807.60, and the bullish upward move continued into Friday with another gain of 5.12 points to close the month of November at 1,812.72 on month end windows dressing activity.
On the weekly chart, the FBMKLCI formed a bullish white candlestick which closed at the highest point of the week, and it confirmed the reversal signal issued by the white inverted hammer candlestick formed the previous week. Hence, the FBMKLCI is likely to continue its upward momentum to move higher in the coming week. On the daily chart, the FBMKLCI also formed a bullish white candlestick which continued its upward move on Thursday, and hence, the key index is likely to continue to climb higher today. Immediate overhead resistance zone is at 1,815 to 1,822, while the downside support zone is at 1,804 to 1,800.
Weekly MACD is still below the weekly signal-line but has hooked upward, and its histogram also contracted upward after expanding downward over the last three weeks, indicating a reversal of the weekly momentum from down to up. Daily MACD was higher and made a golden-cross over its signal line, issuing a buy signal, and indicating the recent consolidation was over and the possible beginning of an uptrend. Weekly RSI (14) was higher at 60.4 from 56.6, and daily RSI (14) was also higher at 61.5 from 58.3, both weekly and daily RSI readings indicated that the FBMKLCI has turned bullish. Weekly Stochastic hooked upward to 85.7 from 84, but is still below the weekly slow stochastic line, indicating an initial reversal of the weekly cycle. Daily stochastic was higher at 75.2 from 61, indicating the daily strength of the FBMKLCI is getting stronger and continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is gradually turning bullish, and the bullish momentum is likely to push the key index higher.
With the strong upward move over last Thursday and Friday, the FBMKLCI has regained its uptrend posture as the key index is now staying above all the short, medium and long term moving averages. In the absence of any dampeners locally and improving external economic climate, especially in the US and Europe, and easing geopolitical tensions, the FBMKLCI could continue its year-end windows dressing which could lead into a new year rally to test new highs, if there is follow-through buying support. Nevertheless, strong overhead resistance is expected at the 1,822 to 1,826 zone, but a breakout from this zone may likely see the FBMKLCI rally towards the 1,850 level.
Last Friday, the Dow fell 10.92 points or -0.07% to close at 16,086.41. This week, the FBM KLCI is likely to trade within a range of 1,778 to 1,833, and today, the FBM KLCI is likely to trade within a range of 1,798 to 1,821.
This week's expected range: 1778 – 1833
Today’s expected range: 1798 – 1821
Resistance: 1815, 1818, 1821
Support: 1798, 1801, 1807
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