Stocks on Bursa Malaysia closed mixed yesterday with the benchmark FBMKLCI eked out marginal gains of 0.63 points or 0.03% to close at an all-time record high of 1,879.83, lifted by gains in selected heavyweights after fluctuating between 1,876.39 and 1,881.03 throughout the day. Market breadth was negative as decliners thumped advancers by 443 to 309, with 345 counters unchanged. Volume increased to 1.63 billion shares worth RM2.35 billion from 1.83 billion shares worth RM2.47 billion transacted on Wednesday.
Taking cue from the correction mood on Wall Street overnight, the FBMKLCI opened 1.19 points lower at 1,878.01 and slipped lower to the intra-day low of 1,876.39 within the first twenty minutes after opening. The key index rebounded from the low and climbed higher gradually to touch the intra-day high of 1,881.03 at late morning. However, the rise could not sustain and the key index fell on active profit-taking activity for most part of the afternoon before a mild rebound which lifted it to close at yet another record high. Chart-wise, the FBMKLCI formed a white spinning-top candlestick which indicates uncertainty of market direction, and may forewarn of a possible reversal as it appeared at the top. Hence, the FBMKLCI may take a breather to consolidate before making move to challenge the all-time intra-day high of 1,882.2 registered on December 31st, 2013.
MACD and its histogram continued to climb higher, indicating an increase in the bullish momentum. RSI (14) was marginally higher at 66.9 from 66.6, indicating a mild improvement in the short term relative strength of the key index in the bullish zone. Stochastic was higher at 90.4 from 84, indicating further improvement in the index’s strength and continuation of the short term up cycle. Readings from the indicators showed a bullish state of the FBMKLCI. However, as the stochastic reading showed an overbought situation, the FBMKLCI may encounter profit-taking correction.
The trend of the FBMKLCI is up and bullish as the key index is at its all-time high level now. However, the intra-day price action of the FBMKLCI showed that heavy profit-taking activity was taking place which might cause the key index to take a breather to consolidate first before continuing its uptrend journey. Immediate overhead resistance is at the all-time intra-day high level of 1,882.2 registered on December 31st, 2013, and a break of the top resistance will send the FBMKLCI to the uncharted territory with an immediate upside target of 1,890 follow by 1,900.
Overnight, the Dow fell another 167.16 points or -1.01% to close at 16,446.81. Today, the FBM KLCI is likely to trade within a range of 1,872 to 1,885.
This week's expected range: 1840 – 1885
Today’s expected range: 1872 – 1885
Resistance: 1881, 1883 1885
Support: 1872, 1874, 1877
Stocks to watch: ABRIC, COMCORP, KUB, MAGNUM, MENANG, OCK, PELIKAN, PICORP, SEALINK, SILKHLD, SKPRES, SOLID, SYF, WCT, WONG
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