Stocks on Bursa Malaysia closed mostly easier yesterday as the market consolidated and take breather from last week’s gains. The FBMKLCI finished 2.56 points or 0.14% easier at 1,861.75, after fluctuating between 1,859.46 and 1,864.2 points throughout the day. Gainers outnumbered losers by 454 to 437 while 300 counters were unchanged. Total volume increased to 3.58 billion units worth RM2.47 billion from 3.41 billion units worth RM2.34 billion last Friday.
Taking cue from the profit-taking retreat on Wall Street last Friday, the FBMKLCI opened 3.10 points lower at 1,861.2 and slipped lower to hit the intra-day low of 1,859.46. The key index rebounded from the low and climbed higher to hit the intra-day high of 1,864.20 at mid-afternoon before sliding lower to close off-high. The FBMKLCI was moving in a narrow range within the negative territory throughout the day. Chart-wise, the FBMKLCI formed a white spinning-top candlestick which indicates indecision of market direction and consolidation. Hence, the FBMKLCI is likely to further consolidate today but with an upward bias as the close was above the opening price yesterday. Immediate overhead resistance zone is at 1,864 to 1,876, while the immediate downside support zone is at 1,859 to 1,855.
MACD continued to climb higher and is approaching the signal-line, and its histogram also further contracted upward, indicating further reduction in the bearish momentum or increased in the upward momentum. RSI (14) hooked downward slightly to 45.4 from 47, indicating a mild pullback in the key index and the short term relative strength is still in the mildly bearish zone. Stochastic was higher at 51.4 from 48.9, indicating further strengthening of the key index and continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is gradually regaining its upward strength and is likely to further strengthen in the short term.
The immediate near term trend of the FBMKLCI remained up as the key index continued to stay above the 5 and 10-day simple moving averages (SMA). However, the key index is still being capped above by a cluster of short to medium term moving averages acting as the overhead resistances. In order to regain the bullish uptrend the FBMKLCI will have to break above the hurdle at 1,876 posted by the 50 and 60-day SMA, or else, the FBMKLCI is likely to stay sideways range-bound. Nonetheless, the longer term uptrend of the FBMKLCI still remained intact. As volume continue to stay above the three billion shares mark, rotational play on the small caps and penny stocks is likely to continue.
Overnight, the Dow rose 175.83 points or 1.06% to close at 16,838.74. Today, the FBM KLCI is likely to trade within a range of 1,854 to 1,869.
This week's expected range: 1824 – 1888
Today’s expected range: 1854 – 1869
Resistance: 1864, 1866, 1869
Support: 1854, 1857, 1859
Stocks to watch: AZRB, IFCAMSC, MASTEEL, MIECO, MUH, NIHSIN, PDZ, PWORTH, PUC, PW, SDB, SNTORIA, SERNKOU, TATGIAP, 3A, WATTA, WILLOW, WINGTM, YKGI, YSPSAH
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