Stocks on Bursa Malaysia closed mixed last Friday ahead of the long Hari Raya Aidilfitri holiday. A last-minute buying in selected heavyweights pushed the local benchmark to close slightly positive amid higher Asian markets, after US unemployment claims fell to an eight-year low and tensions over the downing of a Malaysia Airlines jetliner eased. The FBMKLCI was 0.29 of a point higher at 1,877.34, after moving between 1,868.14 and 1,879.59 throughout the day. Week-on-week, the benchmark index rose 4.37 points from 1,872.97 previously. Gainers led losers by 420 to 406, with 353 counters unchanged. Total volume fell to 1.7 billion units valued at RM1.63 billion, from 2.03 billion units valued at RM1.99 billion transacted on Thursday. Weekly turnover advanced to 11.04 billion shares, valued at RM9.9 billion, from 6.92 billion shares, valued at RM9.005 billion, recorded the previous week.
The FBMKLCI was basically in a sideways consolidation mode last week where the benchmark index opened 1.37 points higher at 1,874.34 last Monday, but ended the day 4.33 points lower at 1,868.64, dragged down by selling in selected heavyweights. The FBMKLCI rebounded on Tuesday to gain 2.72 points at 1,871.36 as investors’ confidence was boosted on the first signs of cooperation from Ukraine's pro-Russian separatists over the downed Malaysian Airlines' plane. Wednesday saw the key index gained a marginal 0.47 of a point to 1,871.83, after moving within a tight range between 1,869.39 and 1,873.7 throughout the day. Boosted by strong reading of Chinese manufacturing data which also lifted the broader sentiment, the FBMKLCI rose 5.22 points to 1,877.05 on Thursday, and the upward momentum continued into Friday to see another gain of 0.29 point to 1,877.34.
On the weekly chart, the FBMKLCI formed a white hammer-like candlestick, a bottom reversal candlestick pattern which indicates buying support appearing at 1,867-point level, and hence, the key index may stage further rebound in the coming week. On the daily chart, however, the FBMKLCI formed a bearish black hangman candlestick which indicates selling pressure appeared initially but a last-minute support effort managed to push the index back to the positive territory, and hence, the FBMKLCI is likely to stay in range-bound consolidation today. Immediate overhead resistance zone is at 1,879 to 1,883, while the downside support zone is at 1,867 to 1,860.
Weekly MACD and its histogram continued to slide southward, indicating further loss in the weekly momentum. Daily MACD turned upward marginally, while its histogram further contracted upward, indicating mild increased in bullish momentum amid consolidation, which could also be interpreted as just a technical rebound. Weekly RSI (14) hooked upward to 59 from 57.6, indicating a mild rebound. Daily RSI (14) was marginally higher at 47.6 from 47.3, indicating a weak gain. Weekly Stochastic continued to slide lower to 62.7 from 72.8, indicating further loss in the index’s weekly strength and continuation of the weekly down cycle. Daily Stochastic, however, continued to rise higher to 27.9 from 21, indicating further strengthening of the key index and continuation of the short term up cycle on the daily perspective. In short, most weekly indicators showed that the FBMKLCI is likely to further consolidate, while the daily indicators showed that the key index might stage further rebound.
The immediate short term trend of the FBMKLCI has turned sideways range-bound as the key index has close above the 5 and 10-day simple moving averages (SMA), but is still capped on top by the 20 and 30-day SMA at 1,882. Hence, a breakthrough above the 1,882-point overhead resistance might see the FBMKLCI rallying higher. However, from the angle of Elliott wave analysis, the FBMKLCI is currently in corrective wave-B, and a break of the immediate support of 1,867-point is likely to see the FBMKLCI slipping lower to test the psychological support of 1,850-point, a 100% wave-C projection, follow by the 161.8% downside projection target of 1,833. As for the coming holiday-shortened week with only three trading days, the FBMKLCI is likely to continue to move sideways range-bound within a range of 1,867 to 1,883 as most investors and fund managers are still away on holiday. However, rotational play on small caps and penny stocks is likely to continue.
Overnight, the Dow fell 70.48 points or -0.42% to close at 16,912.11. This week, the FBM KLCI is likely to trade within a range of 1,857 to 1,892, and today, the FBM KLCI is likely to trade within a range of 1,859 to 1,891.
This week's expected range: 1857 – 1892
Today’s expected range: 1859 – 1891
Resistance: 1882, 1886, 1891
Support: 1859, 1863, 1870
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