Stocks on Bursa Malaysia closed higher yesterday amid positive sentiment on regional bourses and supported by gains in most heavyweight stocks. Most Asian stocks rose on China's better trade figures and Federal Reserve Chair Janet Yellen's promise to keep interest rates low until the US job market is healthy. The FBMKLCI ended 2.41 points or 0.13% higher at 1,862.84 points, after hovering between 1,860.60 points and 1,863.94 points throughout the day. Gainers led losers by 444 to 332, while 325 counters were unchanged. Turnover was higher at 1.81 billion shares worth RM1.97 billion from 1.61 billion shares worth RM1.83 billion recorded on Wednesday.
Taking cue from the strong gain on Wall Street overnight, the FBMKLCI opened 1.23 points higher at 1,861.66 and surged to hit the intra-day high of 1,863.94 within the first fifteen minutes after opening. However, the up surged has no follow through but was met with profit-taking resistance, and the key index continued to move sideways in a tight range for the rest of the day. Chart-wise, the FBMKLCI formed a small white spinning-top candlestick which indicates consolidation with a mild upward bias. Hence, the FBMKLCI is likely to stay in consolidation mode within a range of 1,853 points to 1,871 points.
MACD and its histogram continued to slide lower, indicating further lost in momentum, and as the histogram is almost flat, it indicated that the bearish momentum is gradually diminishing. RSI (14) hooked upward to 56 from 54.2, indicating a mild rebound, and the short term relative strength of the key index is still in a mildly bullish state. Stochastic hooked upward to 58.1 from 56.2, but is still below the slow stochastic line, indicating a mild rebound that is still not strong enough to reverse the current down cycle. Readings from the indicators showed that the FBMKLCI is still in a consolidation mode but with mild sign of a technical rebound.
The immediate short term trend of the FBMKLCI remained sideways range-bound as the key index is current bound within the cluster of short term moving averages with the 5 and 10-day SMA posting resistance at 1,862 point level, while the 20 and 30-day SMA providing the downside support at 1,859 to 1,857 points level. A breakout from this range will see the FBMKLCI continue moving in the direction of the breakout. Nonetheless, the medium and long term uptrend still remained intact. As the week is approaching the weekend, more profit-taking activity might be expected as traders square off their position, and rotational play on the small-cap and penny stocks is likely to continue.
Overnight, the Dow rose 32.43 points or 0.20% to close at 16,550.97. Today, the FBM KLCI is likely to trade within a range of 1,857 to 1,867.
This week's expected range: 1837 – 1891
Today’s expected range: 1857 – 1867
Resistance: 1864, 1865 1867
Support: 1857, 1859, 1860
Stocks to watch: ARANK, BARAKAH, BTECH, EITA, GADANG, GDEX, INARI, IRMGRP, JHM, LBALUM, LCTH, N2N, PELIKAN, PSIPTEK, TAS, WASEONG
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