Stocks on Bursa Malaysia closed higher yesterday propped up by mild buying in lower liners and small cap companies. The local bourse showed some resilience despite bearish regional market sentiment due to the negative outlook ahead of the US Federal Reserve Monetary Policy meeting on Wednesday, and most Southeast Asian bourses traded nearly flat to weaker as investors await the outcome of the two-day policy meeting on the prospect of monetary stimulus tapering. The FBM KLCI rose 4.14 points or 0.23% to 1,774.94 from last week's close of 1,770.80 after hovering between 1,769.12 and 1781.47. Gainers led losers by 443 to 308, with 291 counters unchanged. Turnover rose to 1.5 billion shares worth RM1.74 billion from last Friday's 1.23 billion shares worth RM1.38 billion.
Taking cue from the strong overnight performance on Wall Street, the FBM KLCI opened higher with an upside gap of 6.61 points at 1,777.41 and surged to the intra-day high of 1,781.47 within the first ten minutes of trading. The key index slipped lower on heavy profit-taking activity to hit the intra-day low of 1,769.12 at mid afternoon before rebounding to close off low on last minute bargain-hunting. Chart-wise, the FBM KLCI formed a bearish black spinning-top candlestick which indicates indecision of market direction with a bearish bias. Hence, the FBM KLCI is likely to continue to consolidate within the sideways range of 1,763 to 1,781.
MACD continued to climb higher and has crossed over the zero-line, issuing a buy signal. However, the histogram was just marginally higher, indicating a just a mild gain in the upward momentum, signaling a possible state of consolidation. RSI (14) was higher at 60.4 from 58.9, indicating the FBM KLCI has turned bullish for the short term. Stochastic was also marginally higher at 93.8 from 93.4, indicating a continuation of the short term up cycle and slight improvement in the market strength. Readings from the indicators showed that the FBM KLCI has turned bullish for the short term, but is lacking in momentum. Hence, is likely to go into a consolidation mode.
The short term trend of the FBM KLCI remained up as the key index continued to stay above all the short term moving averages, and the 5-day SMA has crossed above the medium term 50 and 60-day SMA. The medium term trend, however, remained sideways as medium term moving averages has turned flat, and the FBM KLCI continued to stay within a bigger sideways range of 1,660 to 1,811. Nevertheless, the long term trend still remained up.
Overnight, the Dow rose +34.95 points or +0.23% to close at 15,529.73. Today, the FBM KLCI is likely to trade within a range of 1,756 to 1,793.
This week's expected range: 1705 – 1811
Today’s expected range: 1756 – 1793
Resistance: 1781, 1787, 1793
Support: 1756, 1762, 1768