Stocks on Bursa Malaysia ended higher yesterday, lifted by persistent buying momentum in heavyweight blue-chips and penny stocks. The bullish performance of Bursa Malaysia was also in line with its regional peers. The FBMKLCI ended 7.75 points or 0.43% higher at 1,815.34 after opening 0.14 point lower at 1,807.45 and moved between 1,806.25 and 1,816.94 throughout the day. Market breadth was positive with gainers thumped losers by 419 to 357, while 314 counters were unchanged. Volume rose to 1.591 billion shares valued at RM1.849 billion from 1.557 billion shares valued at RM1.732 billion on Monday.
The FBMKLCI opened 0.14 of a point lower at 1,807.45 and slipped lower to hit the intra-day low of 1,806.25 within the first two minutes after opening. The key index rebounded quickly and moved higher to touch the intra-day high of 1,816.94 at noon, but goes into a sideways consolidation in the afternoon to close off high. Chart-wise, the FBMKLCI formed a bullish white candlestick which indicates the bulls or buyers were dominant for the day, and it also confirmed the reversal signal issued by the hammer candlestick formed the day before. Hence, the FBMKLCI is likely to stage a follow through rebound if the buying momentum continues into today. Immediate overhead resistance zone is at 1,818 to 1,822, while the immediate downside support zone is at 1,806 to 1,801.
MACD continued to slide lower, but its histogram contracted upward, indicating a mild reduction in the bearish momentum. RSI (14) hooked upward to 42.7 from 37.9, indicating a rebound, and the short term relative strength of the key index was uplifted to the mildly bearish zone from a bearish state. Stochastic hooked upward to 9.5 from 6.1 and made a golden-cross over the slow stochastic line with a bullish divergence in formation, indicating a possible bottom is in formation. Readings from the indicators showed that the FBMKLCI is staging a technical rebound after hitting the short term oversold zone on the stochastic indicator the previous day.
The short term trend of the FBMKLCI still remained down as the index continued to stay below the short term 5 and 10-day SMA. Nevertheless, the price action over the last two trading days showed that the longer term investors had moved in to pick up shares that are oversold, and if the buying momentum continues into today, the FBMKLCI is likely to climb higher. However, strong resistance is expected at 1,822 to 1,838. The longer term uptrend of the FBMKLCI still remained intact, and as such, any weakness shall be an opportunity to accumulate quality shares.
Overnight, the Dow fell 42.90 points or -0.26% to close at 16,416.66. Today, the FBM KLCI is likely to trade within a range of 1,798 to 1,827.
This week's expected range: 1777 – 1863
Today’s expected range: 1798 – 1827
Resistance: 1819, 1823, 1827
Support: 1798, 1802, 1808
Stocks to watch: ASIAPAC, BRAHIMS, DESTINI, GDEX, KNM, SILKHLD, TGUAN, VITROX
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