FBM KLCI - higher on follow through rebound
Stocks
on Bursa Malaysia closed higher yesterday, helped by gains in selected
heavyweights. The performance of the local bourse was in line with most
of its South-East Asian peers. At close, the benchmark FBMKLCI rose 6.01
points or 0.33% to close at 1,824.39 points, after hovering between
1,818 points and 1,827.4 points throughout the day. Market breadth was
positive with gainers outpacing losers by 438 to 357 while 309 counters
were unchanged. Total volume increased to 2.1 billion units worth RM1.92
billion from the 1.76 billion units worth RM1.71 billion on Tuesday.The FBMKLCI opened 0.38 of a point lower at the intra-day low of 1,818.00 and rebounded to climb higher throughout the morning session with mild pullback correction. It hit an intra-day high of 1,827.40 just before noon, and corrected on mild profit-taking activity in the afternoon session to close off high. Chart-wise, the FBMKLCI formed a bullish white candlestick which continued its rebound from Tuesday, confirming the bottom reversal signal issue by the bullish engulfing pattern. Hence, the FBMKLCI may continue to climb higher today to test its immediate overhead resistance zone at 1827 to 1,832, and the immediate downside support zone is at 1,818 to 1,811.
MACD turned upward, but is still below the signal-line, as well as below the zero-line, indicating the up move yesterday could be just a technical rebound in a bear market. RSI (14) was higher at 49.7 from 46.3, indicating the short term relative strength of the key index is turning neutral from a mildly bearish state. Stochastic was higher at 20.4 from 11.8, and has made a golden-cross over the slow stochastic line, issuing a stochastic buy signal, and the short term cycle has turned from down to up. Readings from the indicators showed that the FBMKLCI is showing signs of turning positive for the short term from a bearish outlook before.
The general trend of the FBMKLCI is still down as the key index is still closing below majority of the short, medium and long term moving averages. However, the bullish upward move over the last two days has reversed the immediate near term trend from down to up as the key index has closed above the 5, 10 and 30-day simple moving average (SMA) yesterday. The key index has also closed above the 360-day SMA, issuing a positive sign that the long term support is still there. Nonetheless, in order for the FBMKLCI to reverse its current downtrend to uptrend, it will have to break above the strong overhead resistance zone of 1,830 to 1,856 posted by a cluster of moving averages, otherwise, the FBMKLCI may move sideways range-bound.
Overnight, the Dow fell 2.09 points or -0.01% to close at 17,685.73. Today, the FBMKLCI is likely to trade within a range of 1,809 to 1,836.
This week's expected range: 1780 – 1856
Today’s expected range: 1809 – 1836
Resistance: 1828, 1832, 1836
Support: 1809, 1813, 1819
Stocks to watch: BTECH, CAB, DESTINI, DUFU,
GADANG, GHLSYS, INSAS, IRCB, IRIS, KEURO, MPAY, MUH, PENTA, PMETAL,
PRLEXUS, RGB, SLP, TDEX, VS
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