Stocks on Bursa Malaysia ended the half-day trading last Thursday mixed, while the benchmark FBMKLCI closed at the day 14.80 points or 0.83% higher at 1,804.03, the highest point of the day, after dipping to 1,780.10 in early trading, underpinned by strong buying interest in most heavyweights. On a weekly basis, the benchmark index rose 1.46 points from previous Friday’s 1,802.57. Market breadth was however negative as losers led gainers by 318 to 291, while 267 counters were unchanged. Turnover for the half-day session was lower at 769.16 million shares worth RM1.309 billion compared with the 1.4 billion shares worth RM1.74 billion on Wednesday.
Taking cue from the 318 points fall of the Dow the previous Friday, the FBMKLCI opened last Monday lower with a downside gap of 8.41 points at 1,794.16 and plunged to the intra-week low of 1,777.62 and rebounded slightly to close 23.69 points lower at 1,778.88. The FBMKLCI rebounded on Tuesday to close 2.37 points better at 1,781.25 after opening 5.22 points higher at 1,784.10 and hit the intra-day high of 1,788.29. Wednesday saw an across-the-board buying interest in line with a regional rally, and the FBMKLCI rose 7.98 points to close at 1,789.23 points. The bullish momentum continued into Thursday, the last trading day for the month of January, with the key index closing 14.80 points higher at the intra-week high of 1,804.03.
On the weekly chart, the FBMKLCI formed a bullish white hammer candlestick, a bottom reversal candlestick pattern, which indicates buying interest has appeared after the index hit an intra-week low of 1,777.62, and a temporary bottom has formed. Nonetheless, to confirm this bottom reversal signal, the FBMKLCI will have to close higher in the coming week. On the daily chart, the FBMKLCI formed a bullish white candlestick which continued the bullish upward move on Wednesday, and the candlestick also covered the downside gap formed on last Monday, indicating a bullish reversal. Hence, the FBMKLCI is likely to continue to move higher in the coming week barring any negative external factors. Immediate overhead resistance is at 1,806, 1,816, and 1,822, while the immediate downside support is at 1,800, 1,780 and 1,777.
Weekly MACD and its histogram continued to slide lower, indicating a continued increased in the bearish momentum on weekly perspective. However, daily MACD hooked upward gently, and its histogram also contracted upward for a second bar, indicating continuation of the technical rebound on Wednesday. Weekly RSI (14) hooked upward gently to 51.7 from 51.3, reflecting a mild rebound, and the weekly relative strength is neutral with a mild bullish bias. Daily RSI (14) climbed higher to 44.4 from 36, indicating the daily relative strength has turned from bearish to mildly bearish. Weekly Stochastic continued to slide lower to 27.5 from 36.6, indicating further weakness and continuation of the weekly down cycle. Daily Stochastic climbed higher to 22.97 from 9, giving out a first indication of a possible beginning of a short term up cycle. Readings from the weekly indicators showed that the FBMKLCI is still weak. However, daily indicators showed signs of possible bottom reversal.
The short and medium term trend of the FBMKLCI remained down; however, the immediate term trend showed sign of reversal as the key index rebounded strongly on last Thursday to close above the 5 and 10-day SMA. Immediate strong overhead resistance is expected at the 1,816 to 1,837 zone, with 1,830, the mid-range of the historical high of 1,882.20 and the low 1,777.62, being a critical resistance level. If only the FBMKLCI can close above the 1,830-point level, would it turned bullish. Otherwise, the upward move is considered just a technical rebound in a bigger downtrend. For the coming holiday-shortened week, the FBMKLCI is likely to continue its technical rebound to move higher technically. However, the direction of the key index is still very much influenced by the development of external factors.
Overnight, the Dow fell 326.05 points or -2.08% to close at 15,372.80. This week, the FBM KLCI is likely to trade within a range of 1,760 to 1,830, and today, the FBM KLCI is likely to trade within a range of 1,764 to 1,828.
This week's expected range: 1760 – 1830
Today’s expected range: 1764 – 1828
Resistance: 1812, 1820, 1828
Support: 1764, 1772, 1788
Stocks to watch: ASIBIO, DESTINI, ECOWLD, MAICA, THHEAVY
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.