Stocks on Bursa Malaysia closed higher yesterday propped up by buying interest in finance counters as fears of the Crimea crisis recede for now, turning market focus back to the US Federal Reserve’s two-day meeting started yesterday. The FBMKLCI finished 5.54 points or 0.31% higher at 1,820.7 after hovering between 1,820.7 and 1,813.54. Market breadth was positive, with gainers outnumbering losers by 397 to 346, while 322 counters were unchanged. Turnover stood at 1.21 billion shares worth RM1.82 billion from Tuesday’s 1.27 billion shares worth RM1.52 billion.
The FBMKLCI opened 1.62 points lower at the intra-day low of 1,813.54 but rebounded to move higher gradually throughout the day with intermittent pullback on mild profit-taking activity, and the key index finished the day at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white Marubozu candlestick which continued the uptrend from the previous day, indicating the bulls or buyers were in full control for the day. Hence, the FBMKLCI is likely to continue its upward move to climb higher today. Immediate overhead resistance zone is at 1,828 to 1,838, while the downside support zone is at 1,813 to 1,802.
MACD turned upward slightly, while its histogram further contracted upward, indicating a reduction in the bearish momentum. RSI (14) was higher at 49.3 from 46.4, indicating the short term relative strength of the FBMKLCI has recovered to the neutral with a mild bearish bias zone from a mildly bearish state. Stochastic was higher at 28.6 from 18.7, and has made a golden-cross over the slow stochastic line, issuing a short term buy signal on the key index. Readings from the indicators showed that the FBMKLCI is staging a follow through rebound after a first rebound on Monday, and hence, the upward momentum may push the index higher.
The short term trend of the FBMKLCI showed first sign of reversing up from a current downtrend as the key index has closed above the immediate short term 5 -day simple moving averages (SMA). Nonetheless, the key index is still staying below the 10, 20 and 30-day SMA. In order to fully reverse the current short term downtrend, the FBMKLCI will have to break through the overhead resistance zone formed by a cluster of short and medium term moving averages with the uppermost resistance at 1,826 posted by the 20-day SMA. The medium term trend still remained sideways range-bound, while the long term trend is still up. With the sentiment turning less bearish, volume is likely to pickup with more rotational play on the small-cap and penny stocks.
Overnight, the Dow rose 88.97 points or 0.55% to close at 16,336.19. Today, the FBM KLCI is likely to trade within a range of 1,808 to 1,828.
This week's expected range: 1773 – 1852
Today’s expected range: 1808 – 1828
Resistance: 1823, 1825, 1828
Support: 1808, 1811, 1815
Stocks to watch: BERTAM, BIG, FPI, CATCHA, KELADI, OCK, OCNCASH, OPENSYS, PRTASCO, SCOPE, SOLID, TROP, TECFAST, YEELEE
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