Stocks on Bursa Malaysia closed higher yesterday as the benchmark FBMKLCI extended gains on continuous buying interest seen in key heavyweights as well as lower liners. The FBMKLCI ended 5.17 points or 0.28% better at 1,850.54 after trading between 1,847.40 and 1,852.13 throughout the day. Losers edged gainers by 409 to 405, while 333 counters were unchanged. Turnover was higher at 2.52 billion shares valued at RM2.113 billion from Wednesday’s 2.40 billion shares valued at RM2.25 billion.
Taking cue from the strong performance of Wall Street overnight, the FBMKLCI opened 2.03 points higher at the intra-day low of 1,847.40 and climbed higher to touch the intra-day high of 1,852.13 within forty five minutes after opening. However, the rise could not sustain and the key index pulled back on profit-taking to move sideways for the rest of the day below the 1,850-point level, but a last minute buying of selected blue-chips managed to push the index to close higher above the psychological resistance level of 1,850. Chart-wise, the FBMKLCI formed a bullish Harami candlestick pattern. The bullish Harami pattern is a bottom reversal candlestick pattern which indicates the appearance of buyers which reversed the previous day’s downtrend. A confirm reversal will require the index to at least closed above the immediate resistance level of 1,854.
MACD and its histogram continued to slide southward, indicating an increase in the bearish momentum. RSI (14) hooked upward to 54.9 from 51.4, reflecting the rebound and the relative strength of the key index is mildly bullish. Stochastic continued to slide lower to 39 from 42.8, indicating a continuation of short term weakness and the down cycle. Readings from the indicators showed that the FBMKLCI is still in a consolidation mode and may extend.
The technical picture of the FBMKLCI remained very much unchanged with the short term trend down but the medium and long term uptrend remained up. The FBMKLCI is likely to continue its consolidation within a range of 1,840 to 1,869, and a breakout of either side of the range will see the key index continue moving in the breakout direction. With volume continue to stay above the two billion shares mark, rotational play on the small-cap and penny stocks will continue.
Overnight, the Dow fell 16.31 points or -0.10% to close at 16,408.54. Today, the FBM KLCI is likely to trade within a range of 1,843 to 1,856.
This week's expected range: 1831 – 1877
Today’s expected range: 1843 – 1856
Resistance: 1852, 1854 1856
Support: 1843, 1845, 1847
Stocks to watch: AZRB, ANNJOO, DESTINI, FAJAR, HUPSENG, KUB, LBALUM, LIONIND, MMODE, MPCORP, OPENSYS, PELIKAN
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