FBM KLCI - higher on technical rebound
Stocks
on Bursa Malaysia ended higher yesterday, rebounding from Monday’s
steep decline amid bargain hunting for oversold counters including oil
and gas related counters, banks and plantations as volatility was
subdued. The FBMKLCI rose 7.7 points or 0.43% to close at 1,785.97,
after opening 1.27 points higher at 1,779.54 and moved between 1,763.55
and 1,789.42 throughout the day. Market breadth was positive with
gainers outpacing losers by 439 to 400 with 313 counters unchanged.
Total volume slipped to 2.16 billion units worth RM2.18 billion from
2.76 billion units worth RM2.95 billion on Monday.The FBMKLCI opened 1.27 points higher at 1,779.54 and climbed higher to hit the intra-day high of 1,789.42 twenty five minutes after opening. However, the rise could not sustain and the key index plunged on heavy profit-taking to hit the intra-day low of 1,763.55 at midmorning. Nonetheless, bargain hunting activity appeared and lifted the FBMKLCI from the low for the rest of the day to close in the positive territory. Chart-wise, the FBMKLCI formed a bullish white hammer candlestick, a key bottom reversal pattern which indicates exhaustion of the sellers and the reappearance of buyers which lifted the key index back to the positive zone. However, as a confirmation of the reversal, the FBMKLCI will have to at least close above 1,789.42, the high of yesterday, and preferably above 1,795, the mid-range of Monday. Immediate overhead resistance zone is at 1,790 to 1,800, while the downside support zone is at 1,778 to 1,763.
MACD and its histogram continued to slide lower, indicating further lost in momentum. RSI (14) hooked upward to 37.2 from 33.7, indicating a mild rebound and the short term relative strength of the key index is still in the bearish state. Stochastic was lower at 23.98 from 31, indicating further weakening of the key index and continuation of the down cycle. Readings from the indicators showed that the FBMKLCI is still weak and bearish, and hence, is likely to further consolidate.
The trend of the FBMKLCI still remained down and bearish as the key index continued to stay below the short, medium and long term moving averages. Nevertheless, the rebound yesterday has lifted the FBMKLCI to close above the 500-day simple moving average (SMA), where a similar rebound on October 17th had led into a rally which moved the key index from the pivot low of 1,766.22 to the pivot high of 1,858.09 on November 3rd, and hopefully with the year-end window dressing activity coming in, the FBMKLCI can be lifted back to above the 1,800-point level. Technically, in order for the FBMKLCI to reverse its current downtrend, it must at least move above the recent pivot high of 1,845.76, and preferably the pivot high of 1,858.09.
Overnight, the Dow rose 102.75 or 0.58% to close at a fresh record of 17,879.55. Today, the FBMKLCI is likely to trade within a range of 1,744 to 1,815.
This week's expected range: 1768 – 1881
Today’s expected range: 1744 – 1815
Resistance: 1795, 1805, 1815
Support: 1744, 1753, 1769
Stocks to watch: ASTRO, GENTING, IFCAMSC, KOSSAN, MUIPROP, SKPRES, SYSTECH, TOPGLOV, YGL, YTL
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