Stocks on Bursa Malaysia closed mixed last Friday but last minute buying interest on selected blue-chips has pushed the benchmark FBMKLCI to close at a fresh record high, marking another high for the third consecutive days, despite downtrend performance on other regional bourses. The FBMKLCI which was traded easier throughout the day rose 3.51 points or 0.19% to finish at 1,883.34, surpassing its previous all-time high of 1,882.2 registered on 31st December 2013, after slipping as low as 1,879.82 during the day. On a Friday-to-Friday basis, the FBMKLCI gained 16.62 points from 1,866.72 on previous Friday. Decliners thumped advancers by 420 to 341, with 328 counters unchanged. Volume increased slightly to 1.68 billion shares worth RM2.3 billion from 1.63 billion shares worth RM2.35 billion transacted on Thursday. Weekly turnover expanded to 6.71 billion shares worth RM8.66 billion, from previous week’s 6.59 billion shares worth RM8.28 billion.
The FBMKLCI opened last Monday 0.96 of a point lower at 1,865.76 and was basically moving sideways in a narrow range to end the day 0.64 of a point lower at 1,866.08 points, ahead of the Wesak Day holiday on Tuesday. Taking cue from the bullish performance of Wall Street overnight which saw the DJIA charting new record high, the FBMKLCI rose 13.12 points to close at a new record high of 1,879.2 on Wednesday. The bullish momentum continued into Thursday and Friday which saw the key index rising continuously over the next two days charting fresh record high.
On the weekly chart, the FBMKLCI formed a bullish white candlestick which breakout from its range-bound consolidation to close at a fresh all-time high, indicating bullish momentum, and hence, the FBMKLCI is likely to continue its upward momentum to climb higher towards the 1,900-point target in the coming week. On the daily chart, the FBMKLCI formed a bullish white candlestick that closed at the intra-day high level after hitting an intra-day low of 1,877.04, indicating the bulls or buyers were in control. Hence, the key index is likely to continue its bullish momentum to move higher into the uncharted territory today. Immediate overhead resistance zone is at 1,885 to 1,889, while the downside support zone is at 1,879 to 1,872.
Weekly MACD continued to climb higher, and its histogram also extended upward after contracting for one bar, indicating a resumption of bullish upward momentum after a mild consolidation. Daily MACD and its histogram continued to climb higher for the third consecutive session after making a golden-cross on 14th May, indicating a continuation of the bullish momentum. Weekly RSI (14) hooked upward to 67.6 from 63.7, indicating a bullish upswing after a mild consolidation. Daily RSI (14) was higher at 68.8 from 66.9, indicating the FBMKLCI is turning more bullish. Weekly Stochastic was higher at 97.3, indicating very strong market strength and continuation of the weekly up cycle, but is overbought. Daily Stochastic was higher at 98.1 from 91.4, indicating very bullish market strength which continues the daily up cycle, but has entered the overbought zone. Readings from both the weekly and daily indicators showed that the FBMKLCI is in very bullish state, but is overbought based on the stochastic indicator, and hence, a pullback correction is imminent.
The FBMKLCI is currently at its best as it closed at the record all-time high level, and the trend is up and bullish. Hence, the bullish momentum is likely to propel the benchmark index to a higher level with immediate upside target of 1,890, follow by the 1,900-point level. Nevertheless, as the key index is overbought as indicated on the daily and weekly stochastic indicator, mild pullback correction is anticipated along the way as investors are likely to take profit or sell on strength as blue-chips rise higher.
Last Friday, the Dow rose 44.50 points or 0.27% to close at 16,491.31. This week, the FBM KLCI is likely to trade within a range of 1,852 to 1,902, and today, the FBM KLCI is likely to trade within a range of 1,872 to 1,889.
This week's expected range: 1852 – 1902
Today’s expected range: 1872 – 1889
Resistance: 1885, 1887 1889
Support: 1872, 1874, 1879
Stocks to watch: ABRIC, ASTINO, CLIQ, ETITECH, FABER, INFOTEC, KPJ, MENTIGA, MPAY, SMISCORP, SONA, TECFAST, UNISEM, WONG, YSPSAH
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