FBM KLCI - higher for third consecutive day
Stocks
on Bursa Malaysia closed higher for the third consecutive day yesterday
on follow-through buying in blue-chips and selected heavyweights. The
market received a boost from the upward revision to the United States'
economic growth rate in the July-September period to 3.9% from 3.5%. The
FBMKLCI added 3.61 points or 0.20% to close at 1,842.17, after moving
between 1,836.79 and 1,845.08 throughout the day. Losers outpaced
gainers by 454 to 320 with 313 counters unchanged. Total volume fell to
1.73 billion units worth RM1.47 billion from 2.09 billion units worth
RM2.46 billion on Tuesday.The FBMKLCI opened 1.96 points higher at 1,840.52 and slipped lower to hit the intra-day low of 1,836.79 twenty minutes after opening. The key index rebounded from the low and rallied higher to touch the intra-day high of 1,845.08 at late morning; and it pulled back on profit-taking activity to move range-bound for the rest of the day. Chart-wise, the FBMKLCI formed a white spinning-top candlestick which indicates uncertainty of market direction, and hence, the key index is likely to pause for a breather today after rising consecutively for three days. Immediate overhead resistance is at 1,845 to 1,852, while the immediate downside support zone is at 1,836 to 1,830.
MACD continued to rise, and has cross-over the zero-line, issuing a bullish buy signal and indicated that the FBMKLCI has turned bullish for the medium term. RSI (14) was higher at 57.8 from 56.3, indicating further improvement of the key index’s short term relative strength to the bullish side. Stochastic was higher at 83 from 52.1, entering the short term overbought zone, indicating the key index has turned strong for the short term and continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is gradually gaining strength. However, a mild pullback correction might be expected ahead to neutralize the stochastic overbought situation.
The short term trend of the FBMKLCI has turned up as the key index has now closed above the short and medium term moving averages, and the 5-day simple moving average (SMA) has also made a golden-cross over the medium term 50-day SMA, issuing a bullish buy signal. The medium and long term trend of the FBMKLCI has turned sideways range-bound as the key index is now bound on top and below by a cluster of medium and long term moving averages. In order to turn uptrend fully, the FBMKLCI will have to break above the overhead resistance zone posted by a cluster of long term moving averages with the 150-day SMA posting as the upper barrier at 1,857.
Overnight, the Dow rose 12.81 points or 0.07% to close at 17,827.75. Today, the FBMKLCI is likely to trade within a range of 1,829 to 1,853.
This week's expected range: 1778 – 1849
Today’s expected range: 1829 – 1853
Resistance: 1845, 1849, 1853
Support: 1829, 1833, 1837
Stocks to watch: AHB, BJFOOD, HOHUP, MAXWELL, PERMAJU, SYF, SYSTECH, WELLCAL
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