Blue-chip stocks on Bursa Malaysia closed on a bullish note yesterday, in tandem with most Asian stocks on improved global sentiment following positive overnight performance on Wall Street, while small caps and penny stocks got a beating on heavy profit-taking activity. The FBMKLCI finished 6.73 points or 0.36% higher at 1,878.89 after fluctuating between 1,872.59 and 1,878.89 points throughout the day. Losers thumped gainers by 758 to 227, while 245 counters were unchanged. Market volume soared to all-time high of over seven billion shares transacted on persistent interest in lower-liners, ACE and penny stocks. Total volume rose to 7.669 billion units worth RM3.304 billion from 5.112 billion units worth RM2.913 billion on Tuesday.
Taking cue from the positive performance on Wall Street overnight, the FBMKLCI opened 2.19 points higher at 1,874.35 and surged higher to hit the morning session high of 1,878.89 within the first fifteen minutes after opening. However, the upward move was met with heavy profit-taking activity which pulled the key index to the intra-day low of 1,872.59 at late afternoon, but a last minute buying on selected blue-chips helped push the key index to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white which indicates the bulls or buyers were in control for the day, and the key index continued its prior uptrend to climb higher. Hence, the FBMKLCI is likely to climb higher today if the buying momentum continues. Immediate overhead resistance zone is at 1,880 to 1,886, while the immediate downside support zone is at 1,872 to 1,865.
MACD and its histogram continued to climb higher, indicating an increased in the bullish momentum. RSI (14) was higher at 56.3 from 52.4, indicating the short term relative strength of the key index is improving in the mildly bullish zone. Stochastic was higher at 74.5 from 60.4, 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 turning bullish for the short term, and the upward momentum is likely to push the key index higher.
The short term trend of the FBMKLCI has reversed up as the key index has closed above the top resistance of 1,876 posted by the cluster of the medium term moving averages. Hence, the upward momentum likely to push the key index higher with immediate upside target of 1880 to 1,886, follow by the all-time high level of 1,896.23. On the broader market, the small caps and penny stocks got a beating yesterday on heavy profit-taking after a strong bull-run which saw the total volume registering a record high of 7.669 billion shares changing hands. The heavy pullback yesterday on the small caps, ACE and penny stocks could see the end of the recent rally with more profit-taking corrections on those heavily churned up stocks.
Overnight, the Dow rose 59.54 points or 0.35% to close at 16,979.13. Today, the FBM KLCI is likely to trade within a range of 1,868 to 1,885.
This week's expected range: 1824 – 1888
Today’s expected range: 1868 – 1885
Resistance: 1880, 1883 1885
Support: 1868, 1870, 1874
Stocks to watch: BTM, CHHB, GKENT, GLOTEC, KEINHIN, KPJ, NOVAMSC, PARKSON, PASUKGB, PFCE, RGB
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