Stocks on Bursa Malaysia ended slightly higher last Friday on mild buying interest amid profit-taking ahead of the weekend, following the overnight losses on Wall Street. The benchmark FBMKLCI rose 2.87 points or 0.15% to 1,876.74, after opening 2.8 points lower at 1,871.07 and hovered between 1,870.09 and 1,876.74 throughout the day. Week-on week, the key index rose 14.04 points or 0.75% from 1,862.7 on previous Friday. Losers outpaced gainers by 369 to 362, while 340 counters were unchanged. Total volume decreased to 1.26 billion shares valued at RM1.39 billion from 1.18 billion shares worth RM1.45 billion on Thursday. Weekly turnover declined to 6.22 billion shares valued at RM7.62 billion from previous week’s 6.31 billion shares worth RM8.01 billion.
The FBMKLCI was in a rebound mode last week after previous week’s consolidation, where the key index opened last Monday 5.89 points higher at 1,868.59, taking cue from the record close of the Dow on previous Friday. However, the rise could not sustain, and the index fell on persistent profit-taking activity to the intra-week low of 1,860.24 before rebounding to end the day 0.99 of a point higher at 1,863.69 points. Taking cue from the third straight session of record closed of the Dow overnight, the FBMKLCI rebounded strongly on Tuesday to close 12.92 points higher at 1,876.61, and the key index gained another 1.77 points at 1,878.38 amid heavy profit-taking activity on Wednesday after hitting an intra-week high of 1,879.91. Thursday saw the FBMKLCI fell 4.51 points to finish at 1,873.87 on profit-taking activity, but the key index managed to stage a technical rebound on Friday to close 2.87 points higher on bargain hunting activity.
On the weekly chart, the FBMKLCI formed a white hammer candlestick, a bottom reversal candlestick pattern which indicates the appearance of bargain hunting activity amid consolidation, and hence, the FBMKLCI is likely to stage further rebound in the coming week if the buying continues. Nonetheless, the key index is still trapped in sideways range of 1,860 to 1,889. On the daily chart, the FBMKLCI formed a bullish piercing-line candlestick pattern, which is also a bottom reversal pattern. Hence, the key index is likely to stage further rebound today if the buying momentum continues into today. Immediate overhead resistance zone is at 1,880 to 1,889, while the immediate downside support zone is at 1,870 to 1,860.
Weekly MACD turned upward slightly, but the histogram further contracted downward, indicating a state of consolidation. On the contrary, daily MACD rose further and made a golden-cross over the signal-line, issuing a buy signal on the daily chart and indicated a bullish reversal. Weekly RSI (14) hooked upward to 62 from 58.2, indicating a technical rebound that sends the key index into the bullish zone from a mildly bullish state. Daily RSI (14) hooked upward to 55.5 from 53.6, indicating a mild rebound, and the key index is still in a mildly bullish state on the daily chart. Weekly Stochastic hooked upward slightly but is still below the slow stochastic line, indicating a mild technical rebound. Daily Stochastic was marginally higher and showed sign of tapering off, indicating a continuation in the short term daily up cycle but a reduction in the upward momentum. In short, the FBMKLCI showed a mild technical rebound on the both weekly and daily chart, and the key index is likely to move higher if the follow through buying momentum continue to come in.
The main trend of the FBMKLCI remained up as the key index continues to stay above all the short, medium and long term moving averages. However, for the immediate short term, the FBMKLCI is still in sideways range-bound as the index continues to fluctuate within the immediate range of 1,860 to 1,889, until a breakout is seen on either side of the range. A breakout above the all-time high level of 1,889.47 will see the FBMKLCI rally towards the 1,900-point psychological target level, while a downside breakout below the 1,860.2-point support level will see the key index correcting deeper to the 1,844-point level, follow by the 1,829-point level, being the 38.2% and 50% Fibonacci retracement support level for the range measuring from 1,769.80 pivot low registered on February 4th 2013 to the pivot high of 1,889.47 on May 19th 2013.
Last Friday, the Dow rose 41.55 points or 0.25% to close at 16,775.74. This week, the FBM KLCI is likely to trade within a range of 1,845 to 1,899, and today, the FBM KLCI is likely to trade within a range of 1,865 to 1,883.
This week's expected range: 1845 – 1899
Today’s expected range: 1865 – 1883
Resistance: 1879, 1881 1883
Support: 1865, 1867, 1872
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