Stocks on Bursa Malaysia closed mixed yesterday on mild profit-taking activity. However, losses were limited by gains in finance stocks and selected heavyweights. The benchmark FBMKLCI ended 4.09 points or 0.22% higher at 1,871.66 points after fluctuating between 1,864.98 points and 1,871.66 points throughout the day. Market breadth was negative as losers led gainers by 395 to 349, with 340 counters unchanged. Volume fell to 1.37 billion shares worth RM2.07 billion from 1.59 billion shares worth RM1.71 billion recorded on Tuesday.
The FBMKLCI opened 2.34 points lower at 1,865.23 and slipped to the intra-day low of 1,864.98 briefly after opening. However, the key index rebounded from the low into the positive territory and moved sideways for a major part of the day, and a last minute buying on selected blue-chips helped pushed the index to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white Marubozu candlestick which indicates the bulls or buyers were in control for the day in pushing the key index higher, and the bullish candlestick formation also confirms the reversal signal formed a day earlier. Hence, the FBMKLCI is likely to continue its upward momentum to climb higher today if the buying support continues. Immediate overhead resistance is at 1,878, follow by 1,882 and 1,889, while the immediate downside support zone is at 1,865 to 1,862.
MACD was marginally lower, but its histogram has contracted upward, indicating a reduction in the downward momentum. RSI (14) rose to 54 from 50.8, indicating a mild rebound, and the short term relative strength has turned mildly bullish from a neutral state. Stochastic was marginally lower at 35.4 from 36.5, indicating a reduction in the bearish strength but the short term cycle is still down. Readings from the indicators showed that the FBMLCI is in consolidation and the bearish momentum was reducing.
The short term trend of the FBMKLCI still remained down. However, with yesterday’s rebound, the key index has closed above the 5-day SMA, issuing an initial sign of possible reversal after falling consecutively for five sessions. Nevertheless, the medium and long term uptrend is still intact. With volume drastically reducing as the school holiday starts, the broad market is likely to further consolidate.
Overnight, the Dow fell 42.32 points or 0.25% to close at 16,633.18. Today, the FBM KLCI is likely to trade within a range of 1,860 to 1,878.
This week's expected range: 1837 – 1912
Today’s expected range: 1860 – 1878
Resistance: 1873, 1876 1878
Support: 1860, 1862, 1867
Stocks to watch: ABRIC, AIRASIA, BENALEC, INARI, IRIS, OCK, OKA, PRLEXUS, SALCON, SCICOM, SILKHLD, SHL, SMRT
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