Stocks on Bursa Malaysia closed higher yesterday in line with a rally in the regional markets, and supported by gains in banking stocks. The benchmark FBM KLCI advanced 7.45 points or 0.47% to 1,603.78, surpassing the previous all-time high of 1,597.08. Advancers beat decliners by 400 to 353 while 324 counters were unchanged. Turnover was higher at 1.44 billion shares worth RM1.4 billion from 1.24 billion shares worth RM2.083 billion last Friday.
The FBM KLCI opened 1.76 points lower at 1,594.57 and moved higher to hit a new record high of 1,598.06 in early morning trade, but heavy profit-taking activity sent the key index to touch the intra-day low of 1,590.27. From here, the FBM KLCI recovered its lost ground and climb higher gradually to hit a new intra-day record high of 1,603.96 before pulling back marginally to close at the new record level of 1,603.78. Chart-wise, the FBM KLCI formed a bullish white candlestick which continues the uptrend of the previous candlestick. With this bullish breakout, the FBM KLCI has entered a new uncharted territory and is likely to continue moving higher to chart new record high level. Immediate overhead resistance is expected at 1,609, 1,613 and 1,618-point levels.
MACD continued to move higher after making the golden-cross last Friday, indicating a change in the momentum from a consolidation mode to a bullish mode. RSI (14) surged higher to 69.5, indicating a continued improvement in the relative strength from bullish to very bullish. Nonetheless, as the RSI is approaching the short term overbought zone of 70, a pullback correction is expected ahead. Stochastic surged higher to 94 from 85.6 previously, indicating a continuation of the short term up cycle and also the improvement of the market strength. Readings from the indicators showed that the FBM KLCI has turned bullish, and the bullish momentum is likely to carry the key index to a higher level. Nevertheless, as the oscillators are approaching the overbought zone, some pullback correction is expected ahead.
The trend of the FBM KLCI remained up and bullish. As the key index has just closed above the middle line of the uptrend channel, it may continue moving higher, and strong resistance is expected at the 1,620-point level exerted by the resistance line (in green). The index-linked counters are likely to continue with their buoyant performance as the index scale new high, while the penny stocks are likely to continue their current mode of consolidation.
Overnight, the Dow rose another +52.45 points or +0.40% to close at 13,264.49. Today, the FBM KLCI is likely to trade within a range of 1,581 to 1,618.
This week's expected range: 1571 – 1611
Today’s expected range: 1581 – 1618
Resistance: 1609, 1613, 1618
Support: 1581, 1585, 1594
Stocks to watch: ARMADA, BIMB, MBSB
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