Stocks on Bursa Malaysia closed marginally higher yesterday with the benchmark FBMKLCI closed 2.63 points or 0.14% higher at 1,871.09, supported by buying in selected blue chips led by Tenaga Nasional. The key index, which moved in a tight range of 5.56 points, touched a low of 1,865.53 and ended at the day's high of 1,871.09. Market breadth was positive with gainers outnumbered losers by 474 to 353 while 325 counters were unchanged. Total volume contracted to 2.68 billion shares worth RM1.93 billion from 2.71 billion shares worth RM2.27 billion on last Friday.
The FBMKLCI opened 2.2 points lower at 1,866.26 and slipped lower to hit the intra-day low of 1,865.53 on mild profit-taking activity. The key index rebounded from the low and climbed higher gradually for the rest of the day to end at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish engulfing candlestick pattern which indicates the bulls were in control for the day, and hence, the FBMKLCI is likely to continue to move higher if the buying support on blue-chips continue into today. Immediate overhead resistance zone is at 1,872 to 1,879, while the immediate downside support zone is at 1,865 to 1,860.
MACD continued to rise and its histogram also extended higher, indicating a mild gain in the upward momentum. RSI (14) rose to 51.7 from 49.7, indicating a mild gain in the index’s short term relative strength to the mildly bullish side from a neutral state. Stochastic was higher at 61.8 from 53.9, and made a bullish cross-over the slow stochastic line, issuing a stochastic buy signal and indicating the possible beginning of a bullish up cycle. Nevertheless, more data is needed to confirm the up cycle. In short, readings from the indicators showed that the FBMKLCI is showing initial sign of moving out of the consolidation.
The short and medium term trend of the FBMKLCI still remained sideways range-bound with a short term range of 1,853 to 1,879, and the medium term range is 1,837 to 1,896. The medium term mid-range is at 1866, and the index moving higher from the mid-range level indicated a mild bullish bias of the key index. Nonetheless, the longer term trend still remained up. As the reporting season has just ended with a lackluster performance on blue-chips, the market is in dire need of fresh catalysts to propel it higher. On the broader market, rotational play on small caps and penny stocks is still alive but the momentum has slowed down.
Overnight, the Dow fell 25.94 points or -0.15% to close at 17,111.42. Today, the FBM KLCI is likely to trade within a range of 1,861 to 1,876.
This week's expected range: 1838 – 1891
Today’s expected range: 1861 – 1876
Resistance: 1872, 1874, 1876
Support: 1861, 1863, 1867
Stocks to watch: AZRB, BCB, BTECH, CAMRES, CONNECT, DGB, DPS, FURNWEB, FUTUTEC, GOODWAY, IQGROUP, KSL, MIECO, MUH, PRLEXUS, REDTONE, VSOLAR, YTLE
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