Stocks on Bursa Malaysia closed higher yesterday as investors across the region continue to increase their holdings on the back of improved market sentiments. Across the region, most of the Asian bourses were higher, with Hong Kong's Hang Seng gaining 16.58 points to 22,953.72, and Singapore's Straits Times rose 12.89 points to 3,121.08, while Japan's Nikkei 225 lost 37.80 points to 14,387.27. The FBM KLCI gained 3.92 points or 0.22% to close at 1,772.4, after opening 9.28 points higher at 1,777.76. The key index hovered between 1,779.40 and 1,769.75 throughout the day. Advancers thumped decliners by 417 to 292, with 326 counters unchanged. Turnover eased to 1.458 billion shares worth RM1.753 billion from Wednesday's 1.99 billion units worth RM2.227 billion.
Taking cue from the three digits gain of the Dow overnight, the FBM KLCI opened higher with an upside gap of 9.28 points at 1,777.76 and surged to the intra-day high of 1,779.40 within the first eight minutes after opening, and the key index slipped lower on heavy profit-taking activity to the intra-day low of 1,769.75 at mid afternoon before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick in a dark-cloud-cover position, a top reversal candlestick pattern which indicates the index was being pushed up at the opening for distribution of shares as the intra-day movement of the key index showed a downtrend even though the index was staying in the positive territory throughout the day. Hence, the FBM KLCI is likely to correct downward or consolidate today. Immediate overhead resistance zone is at 1,779 to 1,788, while the downside support zone is at 1,769 to 1,763.
MACD and its histogram continued to climb higher, indicating a further improvement in the bullish momentum. RSI (14) was higher at 59.7 from 58.5, indicating a the key index is turning bullish from a mildly bullish state. Stochastic hooked downward slightly to 93.2 from 94, indicating a pulled back correction is in the brewing as the stochastic entered the overbought zone. Readings from the indicators showed that the FBM KLCI is in a bullish state, but is overbought as indicated by the stochastic, and hence, the FBM KLCI is likely to correct or consolidate to neutralize the overbought situation.
The short term trend of the FBM KLCI is up, but the medium term trend is still sideways as the medium term moving averages has turned flat and the key index continued to stay within a big sideways range of 1,826 to 1,660. The long term trend, nevertheless, is still up. As Monday is the Hari Malaysia holiday, the market is likely to trade cautiously today ahead of the long weekend, and we would like to wish all Malaysians "Selamat Hari Malaysia".
Overnight, the Dow fell 25.96 points or -0.17% to close at 15,300.64. Today, the FBM KLCI is likely to trade within a range of 1,758 to 1,789.
This week's expected range: 1682 – 1795
Today’s expected range: 1758 – 1789
Resistance: 1777, 1783, 1789
Support: 1758, 1764, 1768
Stocks to watch: JAKS, MMODE, SERSOL, SERSOL-WA, STEMLFE, SUMATEC