FBM KLCI - higher on follow through buying
Stocks
on Bursa Malaysia closed mixed yesterday with the benchmark FBMKLCI
ended on slightly firmer note, supported by buying interest in
blue-chips, mostly oil- and gas-related. Oil and gas counters were in
the limelight after the government planned to abolish the fuel subsidies
beginning Dec 1. The FBMKLCI gained 4.79 points or 0.26% to close at
1,838.56, after moving between 1,830.48 and 1,843.55 throughout the day.
Losers outpaced gainers by 476 to 308 with 305 counters unchanged.
Total volume fell to 2.09 billion units worth RM2.46 billion from 2.24
billion units worth RM1.91 billion on Monday.The FBMKLCI opened 0.28 of a point lower at 1,833.49 and slipped lower on profit-taking activity to hit the intra-day low of 1,830.48 within the first twenty minutes after opening. The key index rebounded from the low and rallied to touch the intra-day high of 1,843.55 in the next twenty minutes. Thereafter, the key index pulled back to move sideways range-bound for the rest of the day. Chart-wise, the FBMKLCI formed a bullish white candlestick with a long upper shadow which closed slightly above the mid-range of the day, indicating heavy profit-taking activity during the day. Hence, the FBMKLCI is likely to pause for a breather to consolidate its gains over the last two days. Immediate overhead resistance zone is at 1,843 to 1,850, while the downside support zone is at 1,830 to 1,827.
MACD and its histogram continued to move higher and making a golden-cross on Monday, indicating continuation of the bullish momentum. RSI (14) was higher at 56.3 from 54.4, indicating an improvement in the short term relative strength in the mildly bullish zone. Stochastic was higher at 52.1 from 35.3, indicating the key index is turning strong and continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is gradually turning bullish for the short term and is likely to move higher.
The general trend of the FBMKLCI is still down. However, with the bullish upward move over the last two days, the short term trend of the FBMKLCI has turned up as the key index has now closed above the short term moving averages, and the 5-day simple moving average (SMA) has also crossed above the 15-day SMA. On top of that, the FBMKLCI has also closed above the medium term 50 and 60-day SMA, issuing a bullish signal for the medium term. Nonetheless, the FBMKLCI is still capped on top by a cluster of 100 to 240-day SMA posting a strong overhead resistance zone at 1,847 to 1,858. In order for the FBMKLCI to fully reverse its current downtrend, it must break above this immediate strong overhead resistance zone.
Overnight, the Dow fell a marginal 2.96 points or -0.02% to close at 17,814.94. Today, the FBMKLCI is likely to trade within a range of 1,818 to 1,856.
This week's expected range: 1778 – 1849
Today’s expected range: 1818 – 1856
Resistance: 1844, 1850, 1856
Support: 1818, 1824, 1831
Stocks to watch: ASTRO, BPLANT, BRAHIMS, GTRONIC, KEURO, MEDAINC, MITRA, MYEG, NOVAMSC, PICORP, UNISEM, WPRTS
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