Stocks on Bursa Malaysia closed higher yesterday as continued buying momentum in the small-capitalised stocks and selected blue-chips helped the benchmark FBMKLCI to close marginally higher. The FBMKLCI finished 3.54 points or 0.19% higher at 1,861.58 after fluctuating between 1,854.87 and 1,863.37 points throughout the day. Losers led gainers by 431 to 423, while 319 counters were unchanged. Total volume increased to 3.95 billion units worth RM2.58 billion from 3.61 billion units worth RM2.68 billion on Wednesday.
Despite the strong close on Wall Street overnight, the FBMKLCI opened 3.17 points lower at 1,854.87, the intra-day low of the day. The key index rebounded and rallied to hit the intra-day high of 1,863.37 within the next thirty minutes, but the bullish move was met with resistance from profit-takers and the key index pulled back from the high to move sideways range-bound for the rest of the day, and a last minute buying effort managed to push the index to close higher. Chart-wise, the FBMKLCI formed a bullish white candlestick which continued the uptrend from the past three sessions and indicated the bulls is still in control. Hence, the FBMKLCI is likely to continue to climb higher today if the buying momentum continues. Immediate overhead resistance zone is at 1,865 to 1,870, while the immediate downside support is at 1,854 to 1,850.
MACD continued to rise and the histogram also continued to contract upward, indicating an increased in the short term momentum to the bullish side. However, as MACD is still below the signal-line as well as below the zero-line, current upward move may turn out to be just a technical rebound. RSI (14) rose to 45.1 from 42.7, indicating an improvement in the short term relative strength to the bullish side. Stochastic was higher at 39.5 from 31.2, indicating further strengthening of the index’s strength and continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is gradually gaining strength after the recent sell down, but has not turn fully bullish yet as all three indicators is still in the bearish zone.
The short and medium term trend of the FBMKLCI is still down while the longer term uptrend is still intact. However, with yesterday’s upward move, the key index has closed above the immediate near term 5 and 10-day SMA, indicating a near term uptrend. Nonetheless, in order to reverse the current downtrend, the FBMLCI will have to break through the cluster of overhead short and medium term moving average resistances, with the 30, 50 and 60-day SMA posting as top resistance at 1,875-point level. On the broader market, rotational play on small cap and penny stocks is likely to continue as the volume traded still remained above three billion shares.
Overnight, the Dow rose 61.78 points or 0.37% to close at 16,713.58. Today, the FBM KLCI is likely to trade within a range of 1,848 to 1,871.
This week's expected range: 1786 – 1916
Today’s expected range: 1848 – 1871
Resistance: 1865, 1868, 1871
Support: 1848, 1851, 1856
Stocks to watch: AJIYA, AMPROP, BJASSET, BPPLAS, DBHD, EURO, FIAMMA, GBGAQRS, GPA, GUH, ILB, KINSTEL, MUI, MBSB, MMSV, NICORP, SDB, UNISEM, WEIDA
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