Stocks on Bursa Malaysia closed higher yesterday in quiet trading as investors were still away for an extended Hari Raya Aidilfitri break, and the market was also waiting for the outcome of the US Federal Reserve (Fed) policy meeting later in the night. The FBMKLCI rose one point or 0.05% to 1,878.34, after moving between 1,877.51 and 1,886.39 throughout the day. Gainers edged losers by 461 to 408, with 293 counters unchanged. Total volume increased to 2.11 billion units valued at RM2.30 billion from 1.70 billion units valued at RM1.62 billion transacted on Friday.
The FBMKLCI opened higher with an upside gap of 6.74 points at 1,884.08 and surged to the intra-day high of 1,886.39 within the first ten minutes after opening. However, the rise could not sustain, and the key index slipped lower on persistent profit-taking to hit the intra-day low of 1,877.51 just before closing, giving back all the gains before a last minute rebound to close marginally higher. Chart-wise, the FBMKLCI formed a bearish black candlestick which indicates heavy selling pressure or distribution throughout the day, and hence, the key index is likely to further pull back or stay in range-bound consolidation today. Immediate overhead resistance zone is at 1,880 to 1,886, while the immediate downside support is at 1,867.
MACD turned upward marginally, but is still below the zero-line. However, its histogram further contracted upward, indicating a state of consolidation with mild increased in the momentum. RSI (14) was slightly higher at 48.7 from 47.6, indicating an improvement in the index’s short term relative strength to the bullish side. Stochastic was higher at 35.4 from 27.9, indicating continuation of the short term up cycle and further strengthening of the key index. Readings from the indicators showed that there is a mild improvement in the key index’s momentum to the bullish side. Nonetheless, as MACD is still below the zero-line and RSI below the 50-level, the improvement could well be just a technical rebound.
The immediate near term trend of the FBMKLCI has turned up as the key index has now closed above the 5 and 10-day SMA. Nevertheless, the 5-day SMA is still below the 10-day SMA, and hence, the current upswing could be just a dead-cat-bounce in a short term sideways range-bound market. Nonetheless, the long term uptrend is still very much intact. The FBMKLCI is likely to stay sideways range-bound this holiday-shortened week as many investors are still on Hari Raya holiday, but the small cap and penny stocks are likely to remain active on rotational play.
Overnight, the Dow fell 31.75 points or -0.19% to close at 16,880.36. Today, the FBM KLCI is likely to trade within a range of 1,866 to 1,895.
This week's expected range: 1857 – 1892
Today’s expected range: 1866 – 1895
Resistance: 1884, 1889, 1895
Support: 1866, 1871, 1875
Stocks to watch: A&M, ANNJOO, BPPLAS, GPHAROS, GPACKET, GREENYB, IREKA, JOHOTIN, KNM, L&G, LIONDIV, MPCORP, MKLAND, PDZ, PRESTAR, SMRT, TAFI, ZELAN
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