Stocks on Bursa Malaysia closed higher yesterday on late buying support prompted by overnight gains on Wall Street. The benchmark FBMKLCI moved in line with the regional markets, which rose after the US Federal Reserve's (Fed) March meeting revealed a more dovish stance than what investors expected. The FBMKLCI ended 3.77 points or 0.20% higher to close at 1,859.52 after moving between 1,855.56 and 1,860.28 throughout the day. Gainers led losers by 546 to 307, while 306 counters were unchanged. Turnover declined to 2.08 billion shares worth RM2.32 billion from 2.22 billion shares worth RM2.38 billion on Wednesday.
Taking cue from the strong performance of Wall Street overnight, the FBMKLCI opened higher with an upside gap of 3.74 points at 1,859.49 and surged to the intra-day high of 1,860.28 within the first ten minutes after opening. However, the rise could not sustain, and the key index slipped lower on active profit-taking activity to hit the intra-day low of 1,855.56 at noon. The key index stayed sideways consolidation throughout the afternoon session before a last minute buying in selected blue-chips which push the index to close near the high. Chart-wise, the FBMKLCI formed a Doji candlestick with a long lower shadow which indicates uncertainty of market direction amid heavy profit-taking activity. Hence, the FBMKLCI is likely to consolidate today. Immediate overhead resistance zone is at 1,860 to 1,869, while the downside support zone is at 1,851 to 1,846.
MACD turned upward slightly, but the histogram continued to slide lower, indicating a state of consolidation. RSI (14) was higher at 63.7 from 61.7, indicating a mild gain in the relative strength. Stochastic continued to slide lower to 74.9 from 78.4, indicating further weakness in the key index and continuation of the short term down cycle. Readings from the indicators showed that the FBMKLCI is losing its momentum, and is likely to further consolidate.
The overall trend of the FBMKLCI is up. However, for the immediate near term, the FBMKLCI has turned sideways range-bound as the index continued to fluctuate within the short term sideways range of 1,851 to 1,869, and a breakout on either side of the range will see the FBMKLCI continued to move in the breakout direction. With volume maintaining above two billion shares, the broad market is likely to continue with rotational play on the small-cap and penny stocks.
Overnight, the Dow fell 266.96 points or 1.62% to close at 16,170.22. Today, the FBM KLCI is likely to trade within a range of 1,848 to 1,861.
This week's expected range: 1810 – 1899
Today’s expected range: 1848 – 1861
Resistance: 1857, 1859, 1861
Support: 1848, 1849, 1852
Stocks to watch: ARANK, AZRB, BRIGHT, CYL, FAJAR, FARMBES, GUNUNG, HIAPTEK, HSL, JADI, KNM, KSSC, PMETAL, SALCON, SCOMIES
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