Stocks on Bursa Malaysia closed mixed yesterday as most investors remained on the sidelines following Wall Street's negative performance last week, and investors are also closely monitoring the deepening geopolitical tension between Russia and the West following developments in Ukraine. Nonetheless, the FBMKLCI rebounded with a gain of 10.04 points or 0.56% to 1,815.16 after hovering between 1,802.88 and 1,815.16 on buying interest in the plantation and consumer stocks. Losers outnumbered gainers by 436 to 300, while 336 counters were unchanged. Turnover stood at 1.27 billion shares worth RM1.52 billion from the 1.37 billion shares valued at RM2.08 billion on last Friday.
The FBMKLCI opened yesterday 1.03 points higher at 1,806.15 but slipped to the intra-day low of 1,802.88 within the first thirty minutes after opening on continued selling pressure after a big fall on last Friday. The key index rebounded from the intra-day low on bargain-hunting and climbed higher for the rest of the day to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white piercing-line candlestick pattern, a bottom reversal pattern which indicates a fight back of the bulls after being beaten over the last few sessions. Hence, the FBMKLCI is likely to continue its rebound to move higher today if the buying momentum continues. Immediate overhead resistance zone is at 1,817 to 1,821, while the downside support zone is at 1,802 to 1,800.
MACD was lower, but its histogram contracted upward marginally, indicating a reduction in the bearish downward momentum. RSI (14) hooked upward to 46.4 from 40.5, reflecting the rebound, and the short term relative strength has improved to the mildly bearish zone from a bearish state. Stochastic hooked upward to 18.7 from 12.5, indicating a rebound after entering the oversold zone. Readings from the indicators showed that the FBMKLCI was staging a technical rebound after falling into the stochastic oversold zone.
The short term trend of the FBMKLCI remained down as the key index continued to stay below all the short term moving averages. The upward move seen yesterday was merely a technical rebound after the key index falling into the short term oversold zone. In order to reverse the current downtrend, the key index will have to move above 1,824-point, the highest resistance level posted by the 10 and 60-day SMA at the moment. Nevertheless, the long term uptrend still remained intact for the time being. Within volume continued to dwindle, the broad market is likely to stay in consolidation mode with rotational play on selected small-cap and penny stocks.
Overnight, the Dow rose 181.55 points or 1.13% to close at 16,247.22. Today, the FBM KLCI is likely to trade within a range of 1,794 to 1,827.
This week's expected range: 1773 – 1852
Today’s expected range: 1794 – 1827
Resistance: 1819, 1823, 1827
Support: 1794, 1798, 1806
Stocks to watch: ENCORP, HALEX, KGB, PTARAS, SCICOM, TITIJYA, YOCB
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