FBMKLCI - sign of reversal
Stocks
on Bursa Malaysia ended on a firmer note yesterday on continuous buying
support for selected heavyweights and index-linked stocks amid mixed
regional markets. The benchmark FBMKLCI gained 5 points or 0.29% to end
at 1,749.05, after opening 1.37 points higher at 1,745.42 and moved
between 1,744.96 and 1,754.27. Losers trounced gainers by 542 to 280,
while 247 counters were unchanged. Total volume fell to 1.51 billion
shares worth RM1.67 billion from 1.58 billion shares worth RM1.64
billion on Monday.Taking cue from the strong performance of Wall Street overnight, the FBMKLCI opened 1.37 points higher at 1,745.42 and rallied higher to the morning session high of 1,752.81 in the first thirty minutes. However, heavy profit-taking activity dragged the key index to the intra-day low of 1,744.96 at mid-morning. The key index rebounded from the low and moved higher gradually to touch the intra-day high of 1,754.27 just before closing, but some last minute profit-taking pulled the index to close off high. Chart-wise, the FBMKLCI formed a white shooting-star candlestick, a top reversal candlestick pattern which indicates possible end to the current uptrend, and hence, the FBMKLCI is likely to pullback or pause for consolidation after running up consecutively for five sessions. Immediate overhead resistance zone is at 1,754 to 1,765, while the downside support zone is at 1,744 to 1,730.
MACD continued to rise, indicating further improvement in the momentum to the upside, and it also made a golden-cross over the signal-line, issuing a bullish buy signal. RSI (14) was higher at 47.9 from 46.6, indicating further improvement of the short term relative strength in the mildly bearish zone. Stochastic was higher at 58.3 from 37.6, indicating further improvement of the index strength and continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is gradually turning stronger, and is likely to continue its short term uptrend.
The short term trend of the FBMKLCI has turned up as the key index has closed above the short term 5, 10, and 15-day simple moving averages (SMA). However, the key index was met with some resistance at the 20-day SMA level at 1,749, as it pulled back to close below it after piecing through it earlier. Hence, the FBMKLCI is likely to pause for a short consolidation before continuing its uptrend, and a breakthrough of the 20-day SMA at 1,749 will see the key index moving higher to test the 30-day SMA currently at 1,773. Nevertheless, do expect the key index to meet strong resistances at 1,758-point level as pointed out in yesterday’s analysis that the level is a convergence of a few Fibonacci resistance levels. The market is likely to stay quiet today ahead of the Christmas holiday tomorrow, and we would like to take this opportunity to wish our Christians readers a Merry Christmas and others a happy holiday.
Overnight, the Dow rose 64.73 or 0.36% to close at a fresh record high of 18,024.17. Today, the FBMKLCI is likely to trade within a range of 1,735 to 1,763.
This week's expected range: 1653 – 1751
Today’s expected range: 1735 – 1763
Resistance: 1753, 1758, 1763
Support: 1735, 1740, 1744
Stocks to watch: AMMB, BJAUTO, EG, MAXIS, MMCCORP, PESTECH, SILKHLD, SUNZEN, TMCLIFE, TROP
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