FBMKLCI - rebounded to close higher
Stocks
on Bursa Malaysia ended higher yesterday, rebounding from Tuesday’s
steep decline as local investors took advantage of foreign selling. At
close, the benchmark FBMKLCI stood at 1,681.9, up 7.96 points or 0.48%,
after opening 0.9 point lower at 1,673.04. Market breadth was positive
with gainers trounced losers by 648 to 257, while 228 counters were
unchanged. Total volume rose to 1.94 billion units worth RM2.06 billion
from 1.64 billion units worth RM2.1 billion on Tuesday.Tracking the weak performance of Wall Street overnight, the FBMKLCI opened 0.9 of a point lower at 1,673.04 and slipped to the intra-day low of 1,671.82 five minutes after opening. The key index rebounded from the low and staged a rally to hit the intra-day high of 1,691.99 at mid-morning, and the index pulled back and moved sideways range-bound for the rest of the day. Chart-wise, the FBMKLCI formed a bullish white piercing-line candlestick pattern, a key bottom reversal pattern which indicates the fight back of the bulls after being beaten down badly for three consecutive sessions. Hence, the FBMKLCI is likely to stage a follow through rebound today to move higher. Immediate overhead resistance zone is at 1,691 to 1,700, while the immediate downside support zone is at 1,671 to 1,660.
MACD continued to slide lower but its histogram was just marginally lower, indicating a reduction in the bearish momentum. RSI (14) hooked upward to 26.8 from 23.7, indicating a mild technical rebound, and the key index is still in a very bearish state. Stochastic hooked upward to 2.5 from 0.9 and is still below the slow stochastic line, indicating a mild rebound. Readings from the indicators showed that the FBMKLCI staged a mild technical rebound yesterday after being seriously oversold.
The trend of the FBMKLCI still remained down and bearish as the key index continues to stay below the short, medium and long term moving averages. The upward move yesterday was merely a relief rebound in an extremely oversold market, and the FBMKLCI is likely to continue its rebound from yesterday to climb higher today. However, in order to reverse the immediate near term downtrend, the FBMKLCI must at least close above the 5 and 10-day simple moving average (SMA) overhead resistance which is currently at 1,706 and 1,727 respectively. In order to fully reverse the current downtrend, the FBMKLCI will have to move above the highest SMA resistance zone at 1,847-point posted by a cluster of long term moving averages. Otherwise, the key index may continue its downtrend to slide lower.
Overnight, the Dow rose 288.00 or 1.69% to close at 17,356.87. Today, the FBMKLCI is likely to trade within a range of 1,651 to 1,712.
This week's expected range: 1685 – 1800
Today’s expected range: 1651 – 1712
Resistance: 1691, 1702, 1712
Support: 1651, 1661, 1671
Stocks to watch: ARMADA, DESTINI, DIALOG,
IFCAMSC, KAREX, KNM, MAHSING, MUIIND, MHB, MUIPROP, PMCORP, PMHLDG,
TNLOGIS, UNISEM, WPRTS
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