Stocks on Bursa Malaysia closed sharply higher yesterday, boosted by industrial, as well as trade and services-related companies. The market saw strong buying interest following the overnight fall in oil prices. The FBMKLCI rose 14.46 points or 0.81% to close at 1,810.68, after opening 4.94 points higher at 1,801.16 and hovered between 1,800.44 and 1,813.13 throughout the day. Gainers outpaced losers by 670 to 185, while 249 counters were unchanged. Total volume rose to 1.59 billion shares worth RM2.01 billion from 1.24 billion shares valued at RM1.38 billion on Tuesday.
Following the strong performance on Wall Street and the Deepavali holiday on Wednesday, the FBMKLCI did a catch up to open 4.94 points higher at 1,801.16 and rallied higher to hit the morning session high of 1,809.33 and pulled back on profit-taking activity. The key index continued its upward move at mid-morning for the rest of the day to touch the intra-day high of 1,813.13 before closing off high on profit-taking. Chart-wise, the FBMKLCI formed a bullish white candlestick which indicates the bulls or buyers were dominant for the day. Hence, the FBMKLCI is likely to climb higher today if the buying momentum continues. Immediate overhead resistance zone is at 1,813 to 1,822, where 1,822 is the downside gap formed on October 10th, and the immediate downside support zone is at 1,800 to 1,795.
MACD continued to rise and its gap to the signal-line is also narrowing as indicated by the fast contracting histogram, indicating a fast reduction of the bearish momentum. RSI (14) hooked upward to 45 from 37.7, indicating a strong rebound which lifted the short term relative strength of the key index from bearish to a mildly bearish state. Stochastic was higher at 43.7 from 34.3, indicating further improvement of the index’s strength and continuation of the short term up cycle. Readings from the indicators showed that the strength and momentum of the FBMKLCI is improving to the bullish side, and hence, the key index is likely to climb higher on improved momentum.
The general trend of the FBMKLCI is still down. However, the key index has closed above the 10-day simple moving average (SMA) yesterday for the first time after staying below it for 13 consecutive sessions, indicating the immediate near term trend of the FBMKLCI has turned up. Nevertheless, the key index met some resistances from the 15-day SMA yesterday, which is currently at 1,811. A further break of the 15-day SMA will see the FBMKLCI rally higher to the important overhead resistance zone at 1,819 to 1,820 posted by the 20-day SMA and the 360-day SMA, and the FBMKLCI is likely to meet strong resistance at the 1,819 to 1,822 resistance zone.
Overnight, the Dow rose 216.58 points or 1.32% to close at 16,677.90. Today, the FBM KLCI is likely to trade within a range of 1,790 to 1,825.
This week's expected range: 1723 – 1851
Today’s expected range: 1790 – 1825
Resistance: 1815, 1820, 1825
Support: 1790, 1795, 1803
Stocks to watch: AWC, BARAKAH, CENSOF, CSCENIC, CONNECT, CYPARK, ELSOFT, GHLSYS, HEVEA, HSL, INARI, KNM, L&G, MMSV, OCK, SKPRES, SMRT, UNISEM, VSOLAR, YGL
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