Stocks on Bursa Malaysia closed mixed last Friday with the benchmark FBMKLCI making a gain on strong buying support in selected blue-chips, tracking the positive sentiments on regional markets as investors expected positive US employment and factory orders reports released later of the day. The FBMKLCI rose by 3.14 points or 0.17% to close at 1,840.82, after moving between 1,838.03 and 1,844.06 throughout the day. On a weekly basis, the key index rose 0.32 of a point from 1,840.50 on previous Friday. Decliners outpaced gainers by 408 to 367, while 349 counters were unchanged. Total volume fell to 1.71 billion shares worth RM1.5 billion from 2.13 billion shares worth RM1.9 billion on Thursday. Weekly turnover decreased to 11.39 billion shares valued at RM9.43 billion from 12.53 billion shares worth RM10.11 billion on previous week. Bursa Malaysia was closed yesterday for the Aidil Adha holiday.
The benchmark FBMKLCI opened last Monday 0.55 of a point higher at 1,841.05 and finished the day 5.84 points higher at 1,846.34, bolstered by finance-linked counters and bargain hunting activity after five straight weeks of correction. The FBMKLCI retreated on Tuesday to close 0.03 of a point lower at 1,846.31, moving in line with regional peers as Wall Street staged an overnight decline amid unrest in Hong Kong, after hitting an intra-week high of 1,854.21 earlier of the day. The FBMKLCI further retreated on Wednesday to close 0.99 of a point at 1,845.32, after moving between 1,842.60 and 1,847.70 throughout the day following the weak regional sentiment after losses on Wall Street overnight. Thursday saw the key index plunged 7.64 points to 1,837.68 following the hefty fall on Wall Street overnight and a lack of fresh leads, and Friday witnessed a mild rebound in the key index.
On the weekly chart, the FBMKLCI formed a Doji candlestick with a long upper shadow which indicates uncertainty of market direction amid consolidation. Hence, the FBMKLCI is likely to stay range-bound in the coming week with a mild upward bias. On the daily chart, the FBMKLCI formed a bullish white inverted hammer candlestick, a bottom reversal candlestick pattern which indicates the appearance of buying support and a temporary bottom is seen at 1,838. Hence, the FBMKLCI is likely to stage further rebound today if the buying momentum continues into today. Immediate overhead resistance zone is at 1,844 to 1,854, while the immediate downside support zone is at 1,838 to 1,829.
Weekly MACD continue to slide lower and is approaching the zero-line, while the histogram was just marginally lower, indicating a reduction in the bearish momentum on the weekly perspective. Daily MACD hooked upward slightly but is still below the signal-line as well as the zero-line, and its histogram also contracted upward slightly, indicating a mild technical rebound of the key index. Weekly RSI (14) hooked upward slightly to 43.96 from 43.83, indicating a mild rebound on the weekly chart and the FBMKLCI is still mildly bearish on the weekly perspective. Daily RSI (14) hooked upward to 39.2 from 35.6, indicating a weak rebound and the daily relative strength of the key index is still in the bearish zone. Weekly Stochastic continued to slip lower to 18.5 from 22.9, indicating weakness continue to loom, but the FBMKLCI was oversold on the weekly perspective, and a technical rebound might be expected. Daily Stochastic hooked marginally upward to 32.5 from 32.1, indicating consolidation. Readings from the indicators on the weekly chart showed that the FBMKLCI is still weak and mildly bearish, but the downward momentum is reducing and is oversold, and hence, a technical rebound might be expected, while readings from the daily indicators showed a state of consolidation.
The trend of the FBMKLCI remained down and bearish as the key index continue to stay below the short, medium and long term moving averages, particularly the 200 and 240-day simple moving average (SMA). Nevertheless, the FBMKLCI is still holding well above the 300 and 360-day SMA which are currently at 1,829 and 1,818, and a break of the 360-day SMA at 1,818 will really indicates the arrival of a big bear. However, for the immediate near term, the FBMKLCI is likely to stay sideways range-bound within a range of 1,829 to 1,856 as this is the range seen over the last three weeks. For the coming holiday-shortened week, the market is likely to move range-bound and possibly a mild run up pre-Budget 2015 announcement on Friday, 10th October; and the strong rebound on Wall Street last Friday, boosted by stronger-than-expected US September jobs data, should spill over to enhance trading sentiment early this week.
Overnight, the Dow fell 17.78 points or -0.10% to close at 16,991.91. This week, the FBM KLCI is likely to trade within a range of 1,817 to 1,870, and today, the FBM KLCI is likely to trade within a range of 1,831 to 1,850.
This week's expected range: 1817 – 1870
Today’s expected range: 1831 – 1850
Resistance: 1844, 1847, 1850
Support: 1831, 1834, 1837
Stocks to watch: ASIABIO, CAREPLS, DUFU, ESCERAM, GHLSYS, GREENYB, JIANKUN, KGB, MUIIND, MCLEAN, MYEG, SMPC, SUNWAY, SUPERMX
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