Stocks on Bursa Malaysia closed higher yesterday on improved investor sentiment and late buying of TENAGA and selected blue-chips, fuelled by the overnight jump in the Wall Street and Europe stocks. The FBMKLCI ended 7.72 points, or 0.41% higher, at 1,886.84, after hovering between 1,877.84 and 1,886.84. Market breadth was positive as advancers outpaced decliners by 470 to 336, with 325 counters unchanged. Total volume increased to 1.878 billion units worth RM2.047 billion from 1.712 billion shares worth RM1.654 billion on Tuesday.
The FBMKLCI opened 0.11 of a point lower at 1,879.01 and slipped lower to the intra-day low of 1,877.84 ten minutes after opening. The key index rebounded from the low to hit the morning session high of 1,884.52 an hour later and the index pulled back to move sideways range-bound for the rest of the day before a last minute buying of selected blue-chips pushed the index to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white candlestick which indicates the bulls or buyers were in control for the day in pushing the key index higher, and the candlestick formation of morning star pattern showed a confirmation of bottom reversal. Hence, the FBMKLCI is likely to move higher today if the buying momentum continues into today. Immediate overhead resistance zone is at 1,889 to 1,892, while the downside support zone is at 1,877 to 1,870.
MACD hooked upward but is still marginally below the signal-line, indicating a technical rebound and a reduction in the bearish momentum. RSI (14) was higher at 57.2 from 51.4, indicating a strong rebound which pushed the short term relative strength to the mildly bullish state from a neutral state. Stochastic hooked upward to 57.5 from 53 and is still below the slow stochastic line, indicating a rebound but the short term cycle is still down. Readings from the indicators showed that the FBMKLCI was staging a technical rebound and the rebound may push the key index higher.
With the strong rebound yesterday, the short term trend of the FBMKLCI has reversed up as the key index is now closing above all the short term moving averages particularly the 5 and 10-day SMA. Hence, the FBMKLCI has recovered its bullish uptrend posture, and is likely to move higher to re-test its top resistance of 1,892.33 registered on June 24th. Nevertheless, the short term trend of the FBMKLCI is still range-bound within a range of 1,876 to 1,892. On the broader market, with total volume remained lukewarm and the FBMKLCI in a bullish mode, rotational play on small cap and penny stocks is expected to continue.
Overnight, the Dow rose 20.17 points or 0.12% to close at 16,976.24. Today, the FBM KLCI is likely to trade within a range of 1,871 to 1,895.
This week's expected range: 1864 – 1904
Today’s expected range: 1871 – 1895
Resistance: 1889, 1892 1895
Support: 1871, 1874, 1880
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