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Friday, April 29, 2011

FBM KLCI - higher on gradual pace


Stocks on Bursa Malaysia ended mixed yesterday with the key benchmark index boosted by gains in selected heavyweights. The FBM KLCI ended 5.39 points or 0.35% higher at 1,535.30, extending its gains for the fourth consecutive day, after opening 2.45 points better at 1,532.36. Losers led gainers by 381 to 360 while 333 counters were unchanged. Turnover declined to 924.643 million shares, valued at RM1.400 billion, compared with 1.144 billion shares, worth RM1.431 billion, on Wednesday.

The FBM KLCI opened with an up gap of 2.45 points at 1,532.36 and surged to the morning session high of 1,534.45. The key index then moves sideways in a tight range for a major part of the day and touched the intra-day low of 1,531.11 at late afternoon before late buying of selected heavyweights pushed the benchmark index to close at the hay’s high of 1,535.30. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were in control of the day. The key index is now sitting right on the resistance level of 1,535, and is likely to continue its up move to test the next resistance level at 1,541.

MACD continued to move higher, and the histogram also turned shorter upward, indicating the key index’s momentum is gradually turning upward, albeit the MACD is still below the signal line. RSI (14) is higher at 54.3, indicating a pick up in the market strength. Stochastic is higher at 33.7, indicating the beginning of another short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually moving out of its consolidation state and is gradually gaining strength.

The short term trend of the FBM KLCI is currently sideways, and it will have to close above the 1,565 level in order to turn uptrend. The medium term trend remained sideways, while the long term uptrend is still intact. Immediate overhead resistance zone is at 1,541 to 1,565, while the immediate downside support zone is at 1,530 to 1,520. The FBM KLCI is likely to continue its gradual upward climb, and the overall market is likely to remain mixed with second and third liners in rotational play.

Overnight, the Dow rose +72.35 or +0.57% to close at 12,763.31. Today, the FBM KLCI is likely to trade within a range of 1,525 to 1,543.

This week's expected range: 1493 – 1556
Today’s expected range: 1525 – 1543

Resistance: 1537, 1539, 1543
Support: 1525, 1529, 1532

Stocks to watch: MEGB, AIRASIA, PWORTH

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