Stocks on Bursa Malaysia closed mixed on the last trading day for 2013 with the benchmark FBMKLCI hitting a record intra-day high of 1,882.20 before pulling back to close 5.56 points or 0.30% lower at 1,866.95, amid a quiet market. The key index fluctuated between 1,862.52 and 1,882.2 during the trading day. Market breadth was positive as gainers led losers by 416 to 388, with 306 counters unchanged. Volume rose to 1.49 billion shares valued at RM1.67 billion from Monday’s 1.28 billion shares worth RM1.26 billion.
The FBMKLCI opened 0.40 of a point lower at 1,872.13 and slipped lower to hit the intra-day low of 1,862.52 at mid-morning. It rebounded from the low and moved sideways till mid-afternoon where the index staged a breakout rally and climbed to a new record intra-day high of 1,882.20 before pulling back on late hour profit-taking activity to end the day in red. Chart-wise, the FBMKLCI formed a bearish black inverted hammer-like candlestick, a top reversal candlestick pattern, which indicates heavy profit-taking activity after the index hit a new high. Hence, the FBMKLCI is likely to slide lower or consolidate on further profit-taking activity. Immediate downside support zone is at 1,862 to 1,852, while the overhead resistance zone is at 1,872 to 1,882.
MACD and its histogram continued to climb higher, indicating a further increased in the bullish momentum. However, the MACD showed sign of tapering which indicates the upward momentum might be slowing down. RSI (14) hooked downward to 68.7 from 73.2, reflecting a mild pullback in the key index which pulled the key index from a very bullish or overbought state to a bullish state. Stochastic also hooked downward to 87.4 from 91.4, reflecting a pullback in the index. Readings from the indicators showed that the FBMKLCI is undergoing a mild pullback correction, but is still in a bullish state.
The technical picture of the FBMKLCI is up and bullish as the key index continued to stay above all the short, medium and long term moving averages. Nevertheless, after a series of year-end window-dressing activity which push the benchmark index to chart multiple record highs. Some healthy profit-taking activity is likely to appear to neutralize the overbought situation of the FBMKLCI, and this should be viewed as an opportunity to accumulate quality stocks at lower level for medium to longer term gains. Moving forward, the outlook of FBMKLCI in year 2014 still remained positive as the long term uptrend of the benchmark index still remained intact, and with an upside potential of 1,950 to 2,000 points in the medium to long term. On the flip side, the long term downside support is pegged at the 240 and 360-day SMA which are currently at 1,745 and 1,712. Lastly, we would like to wish all our readers a happy and prosperous New Year, may Year 2014 brings you and your family good health, abundance wealth and ample happiness.
On Tuesday, the Dow rose 72.37 points or 0.44% to close year 2013 at a record high of 16,576.66. Today, the FBM KLCI is likely to trade within a range of 1,839 to 1,901.
This week's expected range: 1804 – 1896
Today’s expected range: 1839 – 1901
Resistance: 1878, 1890, 1901
Support: 1839, 1850, 1858
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