Stocks on Bursa Malaysia closed broadly higher yesterday with buying interest in blue-chips and index-linked counters helped lift the market. The FBMKLCI ended 12.02 points or 0.67% higher at 1,797.90, after fluctuating between 1,783.68 and 1,799.45 throughout the day. Market breadth was positive as gainers thumped losers by 498 to 251, while 310 counters were unchanged. Volume rose to 1.83 billion shares worth RM2.2 billion from 1.55 billion shares valued at RM1.63 billion recorded on Wednesday.
The FBMKLCI opened 0.96 of a point lower at 1,784.92 and slipped lower to hit the intra-day low of 1,783.68. The key index rebounded strongly from the low and rallied higher for the rest of the day to touch the intra-day high of 1,799.45 before pulling back slightly to close off-high. Chart-wise, the FBMKLCI formed a bullish white candlestick which indicates the bulls or buyers were in control for the day. Hence, the FBMKLCI is likely to continue its upward momentum to climb higher today. Immediate overhead resistance is at 1,800, follows by 1,804 and 1,810, while the downside support zone is at 1,783 to 1,778.
MACD hooked upward, and its histogram also contracted upward for the second consecutive bar, indicating further reduction in the bearish momentum. However, as MACD is still below the signal-line and the zero line, current upswing may turn out to be just a technical rebound in a downtrend; and more data is required to confirm a reversal. RSI (14) was higher at 44.9 from 39.3, indicating the relative strength of the key index is turning mildly bearish from a bearish state before. Stochastic was marginally lower at 26.37 from 26.44, indicating a state of consolidation. Readings from the indicators showed early signs of possible reversal.
The immediate short term trend of the FBMKLCI has turned up and the key index has closed above the short term 5 and 10-day SMA for the first time after closing below them on January 3rd. Hence, the FBMKLCI is likely to continue its upward momentum to move higher today. However, the key index must at least above the 30-day SMA, currently at 1,822, in order for the short term trend to turn bullish again. Nevertheless, the long term trend still remained up.
Overnight, the Dow rose 188.30 points or 1.22% to close at 15,628.53. Today, the FBM KLCI is likely to trade within a range of 1,772 to 1,815.
This week's expected range: 1760 – 1830
Today’s expected range: 1772 – 1815
Resistance: 1804, 1810, 1816
Support: 1772, 1777, 1787
Stocks to watch: ECOFIRS, EDUSPEC, KNM, MKLAND, MMSV, MPAY, SUMATEC, TGUAN, VITROX
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