Stocks on Bursa Malaysia closed higher yesterday, supported by gains in plantation counters. The benchmark FBMKLCI which was hovering in the negative territory for most part of the day was lifted by last minute buying in plantation counters in response to palm oil prices which have been rising over the last two weeks. At close, the FBMKLCI rose 4.21 points or 0.23% to 1,829.45, after moving between 1,820.59 and 1,828.29.45 throughout the day. Gainers outnumbered losers by 509 to 344, while 304 counters were unchanged. Volume rose to 3.28 billion shares worth RM2.39 billion from the 2.86 billion shares worth RM2.3 billion on Tuesday.
Taking cue from the mild loss of the Dow overnight, the FBMKLCI opened 3.97 points lower at 1,821.27 and slipped to the intra-day low of 1,820.59 within the first three minutes after opening. The key index rebounded from the low, and moved sideways range-bound in the negative territory for a major part of the day, and a last minute buying on plantation counters lifted the index to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish engulfing candlestick pattern, a two days pattern which indicates the bulls were in control. Hence, the FBMKLCI is likely to move higher if the buying momentum continues into today. Immediate overhead resistance zone is at 1,833 to 1,838, while the immediate downside support zone is at 1,820 to 1,813.
MACD was marginally higher, and its histogram was flat, indicating a state of consolidation. RSI (14) hooked upward gently to 56.8 from 55, indicating the key index is still in a mildly bullish state. Stochastic was higher at 90.6 from 87.4, indicating a mild pickup in the market strength. Readings from the indicators showed that the FBMKLCI is in a state of consolidation and is mildly bullish.
The short term trend of the FBMKLCI has turned sideways range-bound as the key index continue to move within a range of 1,813 to 1,833, and a breakout from this range will see the index moving in the breakout direction. The medium term trend is also sideways as the index hovers around the mid-range of the retracement range of 1,882.2 to 1,769.8. Nonetheless, the long term uptrend still remained intact. Judging from the high trading volume of over 3 billion shares yesterday, the small-cap stocks and the lower liners will still remain in focus as the heavyweight blue-chips consolidate.
Overnight, the Dow fell 89.84 points or 0.56% to close at 16,040.56. Today, the FBM KLCI is likely to trade within a range of 1,814 to 1,838.
This week's expected range: 1795 – 1845
Today’s expected range: 1814 – 1838
Resistance: 1832, 1835, 1838
Support: 1814, 1817, 1823
Stocks to watch: CAELY, CUSCAPI, ENGTEX, GOB, GUH, HOHUP, JAKS, SCICOM, SOLID, TDM, TITIJYA, TSH
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