Stocks on Bursa Malaysia closed higher yesterday on last-minute buying interests amid choppy trading, tracking the regional bourses. However, investors remained cautious due to absence of catalyst to help instill the necessary buying confidence. The FBM KLCI was 4.82 points or 0.28% higher at 1,731.68, after moving between 1,724.47 and 1,731.68 throughout the day. Gainers led losers by 443 to 353, with 288 counters unchanged. Total volume increased to 1.79 billion units worth RM1.89 billion from Tuesday’s 1.73 billion units worth RM1.68 billion.
The FBM KLCI opened 0.73 of a point higher at 1,727.59 and moved in and out of the positive and negative zone within a tight range throughout the day. The key index hit the intra-day low of 1,724.47 at mid-afternoon. However, a last minute buying of selected blue-chips helped pushed the key index to close at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white piercing-line candlestick, a bullish reversal candlestick pattern, which indicates the fight back of the bulls after dominance by the bear a day earlier. Hence, the FBM KLCI is likely to continue with the upward swing to move higher today. Immediate overhead resistance zone is at 1,734 to 1,739, while the downside support zone is at 1,724 to 1,718.
MACD continued to climb higher albeit still below the zero-line, and its histogram also extended upward strongly, indicating an increased in momentum to the upside. RSI (14) hooked upward to 39.5 from 36, indicating an improvement in the index’s short term relative strength to the mildly bearish side from a bearish side before. Stochastic was higher at 47 from 35.9, indicating further improvement in the index’s strength. Readings from the indicators showed that the FBM KLCI was staging a technical rebound and is turning stronger gradually.
The general trend of the FBM KLCI still remained down. However, the immediate short term trend has turned sideways as the key index is now staying above the 5, 10, and 15-day simple moving average (SMA), but is still below the 20 and 30-day SMA. Immediate overhead resistance posted by the 20-day SMA is at 1,735, while the 30-day SMA is currently at 1,754. A breakthrough of the 20-day SMA may see the FBM KLCI rallying higher towards the next overhead resistance zone of 1,744 to 1,754. As the month of June is coming to a close, more mid-year window dressing activity by funds is likely to help lift the FBM KLCI higher.
Overnight, the Dow fell 178.00 points or 0.98% to close at 17,966.07. Today, the FBMKLCI is likely to trade within a range of 1,719 to 1,739.
This week's expected range: 1692 – 1754
Today’s expected range: 1719 – 1739
Resistance: 1734, 1736, 1739
Support: 1719, 1722, 1726
Stocks to watch: BPLANT, CENSOF, DAYA, DNEX, EATECH, ENGTEX, EURO, GADANG, INSTACO, JAKS, JERASIA, KPS, MMODE, MAGNA, MAGNI, MUH, MYEG, NIHSIN, OMESTI, ORNA, PERWAJA, PUNCAK, SALCON, SAUDEE, SCOMIEN, SUMATEC, 3A, YSPSAH, ZELAN
Stock pick highlight: JERASIA (8931)
Last Price: RM0.84 +0.07
Support Level: RM0.78, RM0.59
Resistance Level: RM0.86, RM0.90, RM0.93, RM0.96, RM0.98, RM1.02, RM1.05, RM1.08, RM1.13, RM1.20, RM1.32
Entry Level: RM0.83 – RM0.85
Technical Analysis
JERASIA (8931) rebounded from its intra-day low of 0.78 to close higher at 0.84 after hitting the intra-day high of 0.86. Technically, the chart of JERASIA formed a bullish white candlestick with increasing volume indicating strong buying interest came into the stock yesterday. It breaks out from the consolidation forming a small Rectangle pattern breakout. MACD climbed higher and is above the signal-line and zero-line, and its histogram also extended upward strongly, indicating an increased in momentum to the upside and a buy signal. RSI (14) rose to 69.4 from 64.8, indicating the stock is turning very bullish from a bullish state. Stochastic was higher 84.3 from 76.1 and is staying above the slow stochastic line, indicating the stock is turning stronger after recent correction. The long term trend of JERASIA is sideways while the medium term trend is up, and the short term trend is also up with the 5-day SMA staying above the 10-day SMA and both are above the 30-day SMA, and a confirmed breakout above RM0.86 will see an upside target of RM0.90, follow by RM0.93, RM0.96, RM0.98, RM1.02, RM1.05, RM1.08, RM1.13, RM1.20 and RM1.32.
Since the short term trend is bullish, day traders with shorter time frame perspective may ride on the short term bullishness and buy on breakout level (RM0.86). Those with lower risk appetite should wait at the side-line and buy on the dip.
Price Objective
Short Term – target price at (RM0.90, RM0.93, RM0.96 RM0.98, RM1.02), stop loss (RM0.77)
Mid Term – target price at (RM1.05, RM1.08, RM1.13, RM1.20, RM1.32), stop loss (RM0.58)
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