Stocks on Bursa Malaysia closed mixed yesterday with the benchmark FBMKLCI staged a late rebound to close slightly higher as most traders stayed on the sidelines awaiting the outcome of Bank Negara Malaysia's Monetary Policy Committee meeting yesterday. The committee decided to maintain the Overnight Policy Rate at 3.25%. The FBMKLCI rose by 1.54 points or 0.08% to end at 1,845.32 after hitting an intra-day low 1,836.90. Losers outpaced gainers by 506 to 309, with 327 counters unchanged. Total volume shrank to 2.06 billion shares worth RM1.84 billion from 2.24 billion shares worth RM2.30 billion on Wednesday.
Taking cue from the positive close on Wall Street overnight, the FBMKLCI opened 1.08 points higher at 1,844.86 but slipped lower on profit-taking throughout the morning session. The key index hit an intra-day low of 1,836.90 just before noon but rebounded to move gradually higher in the afternoon session to end at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white hammer candlestick, a bottom reversal candlestick pattern which indicates buyers took over at latter part of the day after an initial sell down by the bears. Hence, the FBMKLCI is likely to stage further rebound today if the buying momentum continues. Immediate overhead resistance zone is at 1,850 to 1,855, while the downside support zone is at 1,840 to 1,836.
MACD and its histogram continued to slide southward, indicating an increased in the bearish momentum. RSI (14) hooked upward to 35.5 from 34.1, indicating a mild rebound and the key index is still in a bearish state. Stochastic hooked upward to 20.8 from 18, indicating a technical rebound after the FBMKLCI hit the stochastic oversold zone. Readings from the indicators showed that the FBMKLCI staged a mild rebound after hitting the oversold zone, and hence, is likely to move higher.
The short and medium term trend of the FBMKLCI still remained down and bearish. However, the price action of the FBMKLCI yesterday showed that the key index is finding some strong support at the 1,836-point level as the index formed a double bottom and rebounded strongly to close at the highest point of the day. Hence, the FBMKLCI is likely to stage further rebound to move higher today. Nevertheless, the FBMKLCI will have to move above the 1,880-point level in order to fully reverse the current downtrend, otherwise, it is likely to stay sideways range-bound. On the broader market, rotational play on the small caps and penny stock still remained alive but with a reduced momentum.
Overnight, the Dow rose 109.14 points or 0.64% to close at a fresh record high of 17,265.99. Today, the FBM KLCI is likely to trade within a range of 1,831 to 1,853.
This week's expected range: 1828 – 1896
Today’s expected range: 1831 – 1853
Resistance: 1848, 1850, 1853
Support: 1831, 1834, 1839
Stocks to watch: ARANK, BIG, EFORCE, GREENYB, HEVEA, HOMERIZ, MMSV, PINEPAC, SASBADI, SYSTECH, YTLPOWR
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