Stocks on Bursa Malaysia closed on firm note yesterday helped by rotational interests in lower-liners and small-capitalized stocks as the market staged a late rebound to erase its earlier losses. The FBMKLCI rose 2.35 points or 0.13% to end at 1,853.88 after moving between 1,847.36 and 1,853.88 throughout the day. Losers slightly edged gainers by 413 to 406 while 344 counters were unchanged. Turnover rose to 2.58 billion shares worth RM2.5 billion from 2.02 billion shares valued at RM2.04 billion on Monday.
Despite a three digit gain of the Dow overnight, the FBMKLCI opened 3.22 points lower at 1,848.31 and slipped lower to the intra-day low of 1,847.36 within the first twenty minutes after opening. The key index rebounded from the low and moved range-bound for a major part of the day in the negative territory, and a last minute buying on selected blue-chips helped sent the FBMKLCI to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white candlestick which opened near the low and closed at the high and engulfed the body of the previous day’s candlestick, indicating a fight back of the bulls after being beaten down for two consecutive sessions. Hence, the FBMKLCI is likely to continue its bullish upward momentum to move higher today. Immediate overhead resistance zone is at 1,855 to 1,860, while the immediate downside support zone is at 1,847 to 1,842.
MACD continued to slide lower, and has made a dead-cross over the signal-line, issuing a sell signal and continued loss in momentum. RSI (14) hooked upward to 58.4 from 56.9, indicating a mild rebound and the short term relative strength of the key index is still in the mildly bullish zone. Stochastic continued to slide lower to 55.8 from 65.6, indicating further weakening of the index’s strength and continuation of the short term down cycle. Readings from the indicators showed that the FBMKLCI is still in a consolidation mode with a mild rebound, and hence, the key index is likely to continue to consolidate but with an upward bias.
The immediate near term trend of the FBMKLCI remained down as the key index is still staying below the 5 and 10-day SMA. Nevertheless, the broader trend is still up. Immediate overhead resistance posted by the 5 and 10-day SMA is at 1,855, and a break above this resistance level will see the FBMKLCI regaining its upward momentum to move higher. On the broader market, rotational play on the small-cap and penny stock will continue as can be seen from the growing volume above the two billion shares mark.
Overnight, the Dow rose 89.32 points or 0.55% to close at 16,262.56. Today, the FBM KLCI is likely to trade within a range of 1,843 to 1,860.
This week's expected range: 1831 – 1877
Today’s expected range: 1843 – 1860
Resistance: 1856, 1858 1860
Support: 1843, 1845, 1849
Stocks to watch: FRONTKN, GRANFLO, L&G, MAICA, MALTON, MPHBCAP, OVERSEA, PDZ, PSIPTEK, PRLEXUS, SUNWAY, UEMS, UOADEV
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