Stocks on Bursa Malaysia ended mixed yesterday, reflecting traders' indecision over the mixed economic data. However, the benchmark FBMKLCI finished 3.03 points or 0.16% higher at its intra-day high at 1,843.11, after opening at its intra-day low of 1,835.64 points. Market breadth was negative with losers edging gainers by 435 to 419 while 309 counters remained unchanged. Total volume decreased to 2.39 billion shares worth RM1.84 billion from 2.68 billion shares recorded on Wednesday.
Despite a strong rebound of the Dow overnight, the FBMKLCI opened 4.44 points lower at the intra-day low of 1,835.64 and rebounded to gradually move higher for the rest of the day with mild pullback on intermittent profit-taking activity. The key index surged on last hour buying on selected blue-chips to end at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish Marubozu candlestick which engulfed the body of the previous day’s candlestick, issuing a strong bottom reversal signal which indicates the bulls were in full control for the day. Hence, the FBMKLCI is likely to continue its rebound to climb higher today if the buying momentum continues. Immediate overhead resistance zone is at 1,845 to 1,851, while the downside support zone is at 1,835 to 1,832.
MACD was marginally lower, but its histogram further contracted upward, indicating a state of consolidation. RSI (14) was higher at 37.4 from 34.1, indicating a mild rebound and the short term relative strength of the key index is still in a bearish state. Stochastic hooked upward gently to 19.7 from 19.5, indicating a mild technical rebound after the key index hit the stochastic oversold zone. Readings from the indicators showed that the FBMKLCI has staged a mild technical rebound after being oversold, and is likely to stay in range-bound consolidation until a breakout is seen.
The trend of the FBMKLCI remained down as the key index continued to stay below the short, medium and long term moving averages. However, the price action of the FBMKLCI over the last few sessions showed that the key index is trying to form base at current level, and hence, the FBMKLCI is likely to stay in range-bound consolidation with mild upward bias for the immediate near term. On the broader market, rotational play of the small caps and penny stocks continue to keep the market alive, but the momentum is weakening, and hence, more correction is expected.
Overnight, the Dow plunged 264.26 points or -1.54% to close at 16,945.80. Today, the FBM KLCI is likely to trade within a range of 1,830 to 1,850.
This week's expected range: 1818 – 1875
Today’s expected range: 1830 – 1850
Resistance: 1845, 1848, 1850
Support: 1830, 1833, 1838
Stocks to watch: AZRB, BJAUTO, CAB, ELSOFT, ENGTEX, GSB, HIL, KIMHIN, KPJ, KPSCB, KUB, LBICAP, MUDA, SYF, TALIWRK, 3A, TMCLIFE, WCT
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.