FBM KLCI - higher on technical rebound
Stocks
on Bursa Malaysia rebounded to close in positive territory yesterday,
spurred by bargain hunting mostly in selected blue-chips and
heavyweights. The FBMKLCI rose 11.9 points or 0.66% to close at
1,818.38, after fluctuating between 1,805.35 and 1,818.38 throughout the
day. Advancers thumped decliners by 437 to 345, with 306 counters
unchanged. Total volume increased to 1.76 billion units worth RM1.71
billion from 1.41 billion shares worth RM1.39 billion transacted on
Monday.The FBMKLCI opened 0.04 of a point lower at 1,806.44 and slipped lower to hit the intra-day low of 1,805.35 twenty minutes after opening. The key index rebounded from the low and rallied higher for the rest of the day on bargain hunting on selected blue-chips to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish engulfing candlestick pattern, a bottom reversal pattern which indicates the fight back of the bulls after being beaten down for five sessions consecutively. Hence, the FBMKLCI is likely to stage further technical rebound if the buying momentum continues into today. Immediate overhead resistance zone is at 1,820 to 1,825, while the downside support zone is at 1,805 to 1,800.
MACD turned flat, while its histogram contracted upward for the first time after falling consecutively for ten sessions, indicating a reduction in the downward momentum or a technical rebound. RSI (14) swung upward to 46.3 from 38.7, indicating a strong technical rebound which lifted the key index to the mildly bearish zone from a bearish state. Stochastic hooked upward to 11.8 from 6.8 but is still below the slow stochastic line, indicating a technical rebound after hitting the oversold zone. Readings from the indicators showed that the FBMKLCI was staging a technical rebound yesterday after being oversold, and hence, is likely to move higher on follow through buying momentum.
The technical picture of the FBMKLCI still remained unchanged in that the general trend of the key index is still down. However, the strong technical rebound yesterday indicated the FBMKLCI might have seen a temporary bottom at 1,805 after being sold down consecutively for two weeks from a high of 1,858.09. Nevertheless, it is still too early to call for a trend change as of now, and in order for the FBMKLCI to reverse the current down trend, it must close above the recent pivot high of 1,858.09. On the broader market, the ACE market and small caps are showing resilience with strong buying momentum, and the rotational play is likely to continue.
Overnight, the Dow rose 40.07 points or 0.23% to close at 17,687.82. Today, the FBMKLCI is likely to trade within a range of 1,796 to 1,831.
This week's expected range: 1780 – 1856
Today’s expected range: 1796 – 1831
Resistance: 1822, 1827, 1831
Support: 1796, 1801, 1809
Stocks to watch: ANCOMLB, BARAKAH, CANONE,
DESTINI, GENETEC, GREENYB, IJACOBS, IDEAL, JASKITA, KIANJOO, MIKROMB,
MMSV, NIHSIN, OCNCASH, SYSTECH, UNISEM, YGL
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