Stocks on Bursa Malaysia closed marginally higher last Friday, led by continued buying interest in heavyweights and penny stocks. The uptrend in Bursa Malaysia was also in tandem with most regional markets following positive US employment data. The benchmark FBM KLCI rose 2.00 points or 0.11% to settle at 1,776.16, after hovering 1,775.35 and 1,781.61 throughout the day. On a weekly basis, the FBM KLCI eased 25.67 points from previous Friday's 1,801.83. Gainers led losers by 401 to 356, with 305 counters unchanged. Turnover increased to 2.21 billion shares worth RM1.60 billion from Thursday's 2.14 billion shares worth RM1.87 billion. Weekly turnover rose to 10.636 billion shares valued at RM9.17 billion from previous week's 7.284 billion shares valued at RM8.41 billion.
The FBM KLCI was basically in a correction mode the whole of last week, it opened last Monday 6.04 points lower at 1,795.79 and continuously slid lower the hit the intra-week low of 1,774.16 on Thursday before rebounding slightly on Friday. On the weekly chart, the FBM KLCI formed a bearish black candlestick which formed a lower high and a higher low, and was enclosed within previous week's white candlestick, indicating heavy profit-taking activity on index-linked counters throughout the week. Hence, the FBM KLCI is likely to continue to consolidate within a range of 1,769 to 1,805 in the coming week. On the daily chart, the FBM KLCI formed a white inverted hammer candlestick in Harami position, indicating the key index has hit a temporary bottom at 1,774.16, and showed sign of reversal. Hence, from the daily candlestick formation, the FBM KLCI may stage a technical rebound. Immediate overhead resistance is at 1,784, posted by the previous candlestick's high which coincide with the 5-day SMA.
Weekly MACD hooked downward slightly, while its histogram contracted upward, indicating a state of consolidation. Daily MACD and its histogram continued to slide lower, indicating continued loss in daily momentum. Weekly RSI (14) was lower at 56.1 from 62.1, indicating a loss in the weekly relative strength from bullish to mildly bullish. Daily RSI (14) hooked upward slightly to 54.4 from 53.6, reflecting a mild rebound, and the FBM KLCI is in a mildly bullish state. Weekly Stochastic was higher at 81 from 69.5, indicating the weekly up cycle is still intact. However, daily Stochastic was lower at 67.7, indicating a continuation of the daily down cycle and further weakening of the key index. Readings from the weekly indicators showed some conflicting signals, and hence, the key index is likely to consolidation on the weekly time frame, while readings from the daily indicators showed weakening of the index's momentum, and hence, is likely to further consolidate.
The immediate short term trend of the FBM KLCI has turned down as the key index has now closed below the 5 and 10-day SMA, but is still staying above the 15 and 20-day SMA. Hence, the FBM KLCI is likely to stay range-bound for the short term. For the medium term trend, the FBM KLCI is still in sideways range-bound within a range of 1,700 to 1,811. Nevertheless, the long term uptrend is still intact. As of now, the FBM KLCI is likely to stay sideways range-bound with a downward bias until fresh catalyst appear to move the market. Nonetheless, the FBMSCAL and FBMACE index are still on a strong uptrend, and hence, rotational play on the third liners are expected to continue.
Last Friday, the Dow fell 70.06 points or -0.46% to close at 15,258.24. This week, the FBM KLCI is likely to trade within a range of 1,740 to 1,826, and today, the FBM KLCI is likely to trade within a range of 1,767 to 1,787.
This week's expected range: 1740 – 1826
Today’s expected range: 1767 – 1787
Resistance: 1780, 1783, 1787
Support: 1767, 1771, 1773
Stocks to watch: GPACKET, GPACKET-WA, GTRONIC, HIAPTEK, IRIS, PERDANA, VS