Stocks on Bursa Malaysia traded in a relatively quiet mode yesterday ahead of the long Lunar New Year holiday. The FBM KLCI was basically trading in a narrow range of about 2 points throughout the day before late hour buying pushed the benchmark index to close 3.25 points or 0.26% higher at 1249.42. Market breadth was negative with losers led gainers by 313 to 276 while 255 counters were unchanged. Volume traded remained low at 646 million shares worth RM881 million compared with 615 million shares valued at RM1.16 billion on Wednesday.
The FBM KLCI formed a hanging-man candlestick which might forewarn of a possible top for the current rebound. The index has closed right below the psychological resistance level of 1250, and right above it is the strong resistance level at 1253 formed by the down gap, which happened to coincide with the 10-day MA resistance. If the index is able to break through the resistance at 1253, then it might move up further to challenge the next level of resistance at 1263.
MACD has turned flat, and the histogram is also getting shorter signifying the reduction in downward momentum. It, however, is still in the negative zone reflecting the technical rebound of the index in a prevailing downtrend. RSI continued to move higher but is still in the bearish zone. Stochastic at 22 has just come out of the very weak zone.
The prevailing short term trend of the FBM KLCI is down, any up move is technically considered a rebound, if the rebound failed, then the index might continued its southward journey to retest the recent low of 1224. For the index to reverse its downtrend, it would have to close above 1268.
Today, the FBM KLCI is likely to trade within a range of 1241 to 1255.
This week's expected range: 1220 – 1288
Today’s expected range: 1241 – 1255
Resistance: 1251, 1253, 1255
Support: 1241, 1243, 1246
Stock to watch: AXIATA
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