FBM KLCI - in consolidation
Stocks
on Bursa Malaysia ended almost flat yesterday after range-bound trade
as sentiment was dampened by weakness in regional markets. Regional
bourses were mostly down as traders turned cautious following escalating
tensions in the Middle East and losses on Wall Street. The FBM KLCI
closed 0.68 point or 0.04% lower at 1,818.42, after moving between
1,815.41 and 1,820.52 throughout the day. Gainers edged losers 426 to
397 with 343 counters unchanged. Total volume rose to 2.43 billion units
worth RM1.95 billion from 2.03 billion units worth RM2.12 billion on
Wednesday.Following the heavy losses on Wall Street overnight, the FBM KLCI opened 2.25 points lower at 1,816.85 and slipped lower to hit the intra-day low of 1,815.41 twenty minutes after opening. The key index rebounded and moved range-bound for the rest of the day. It hit an intra-day high of 1,820.52 at late afternoon before pulling back to close off high. Chart-wise, the FBM KLCI formed a white spinning-top candlestick which indicates uncertainty of market direction but with an upward bias amid consolidation. Hence, the FBM KLCI is likely to further consolidate today but with an upward bias. Immediate overhead resistance zone is at 1,820 to 1,823, while the immediate downside support zone is at 1,815 to 1,810.
MACD continued to climb higher and its histogram also extended upward, indicating an increased in the bullish momentum. RSI (14) hooked downward marginally to 59.1 from 59.5, indicating a mild pullback correction. Stochastic was higher at 89.9 from 72.6, indicating the FBM KLCI is still strong for the short term. Readings from the indicators showed that the FBM KLCI is undergoing a mild pullback correction but the underlying strength is still strong, and hence, is likely to rise further after the correction is over.
The technical picture of the FBM KLCI still remained very much the same in that the short and medium term trend is up, while the long term trend still remained sideways range-bound with an upward bias. Immediate overhead moving average resistance zone is at 1,823 to 1,830 posted by a cluster of long term moving average with the 200-day SMA at 1,823 while the uppermost resistance is posted by the 240-day SMA at 1,830. The 100 and 120-day SMA are providing support at 1,785 to 1,791. On the broader market, rotational play on small caps and ACE market counters is likely to remain active with Oil and Gas related stocks in focus after the rebound in crude oil prices due to air strikes on Yemen launched by Saudi Arabia and its allies.
Overnight, the Dow fell 40.31 points or -0.23% to close at 17,678.23. Today, the FBMKLCI is likely to trade within a range of 1,810 to 1,825.
This week's expected range: 1738 – 1857
Today’s expected range: 1810 – 1825
Resistance: 1820, 1823, 1825
Support: 1810, 1813, 1815
Stocks to watch: A&M, APFT, BPURI,
BONIA, CANONE, CBIP, CENTURY, CCM, DOMINAN, EKOWOOD, ESCERAM, HIL,
JIANKUN, KNM, LCTH, LEESK, MAGNI, PERDANA, PICORP, SUMATEC, WINTONI,
WZSATU
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