FBM KLCI - sign of bullish reversal
Stocks
on Bursa Malaysia ended on a firm note yesterday on technical rebound.
Among the stocks that gave the bourse a boost were AXIATA, which rose 30
sen to RM6.92, SIME DARBY, which increased 40 sen to RM9.60, and MAXIS
which surged 26 sen to RM6.88. At close, the benchmark FBMKLCI rose
27.42 points or 1.58% to 1,765.52, after opening 5.34 points lower at
1,732.76. Gainers trounced losers by 502 to 281, while 300 counters were
unchanged. Total volume slipped to 1.2 billion units worth RM1.6
billion from 1.4 billion units worth RM1.7 billion on Tuesday.The FBMKLCI opened 5.34 points lower at the intra-day low of 1,732.76, and rebounded strongly to move higher for the rest of the day with intermittent mild pullback correction. The key index surged higher in the last half an hour to end the day at the highest point. Chart-wise, the FBMKLCI formed a bullish engulfing Marubozu candlestick pattern, a bullish bottom reversal pattern which indicates the bulls or buyers were in full control for the day in driving the key index up. Hence, the FBMKLCI is likely to move higher today if the buying momentum continues into today. Immediate overhead resistance zone is at 1,768 to 1,789, while the downside support zone is at 1,750 to 1,730.
MACD hooked upward, and its histogram contracted upward for the second bar, indicating an increased in the upward momentum. Nonetheless, as MACD is still below the signal-line, current upward may just be a technical rebound. RSI (14) swung upward to 40.2 from 27.9, indicating a bullish swing that lifted the key index from the very bearish zone to the mildly bearish zone. Stochastic swung upward to 13.8 from 6.4, and has made a golden-cross over the slow stochastic line, issuing a stochastic buy signal and indicating the possible beginning of a short term up cycle. Readings from the indicators showed that the FBMKLCI was making a bullish swing yesterday, and the key index is likely to climb higher if the buying momentum continues into today.
The trend of the FBMKLCI still remained down and bearish as the key index continue to stay below most of the short, medium and long term moving averages. However, with the bullish upswing yesterday, the FBMKLCI has closed above the 5-day simple moving average (SMA) for the first time after breaking below it since November 28th, indicating the immediate near term trend is turning up. Nonetheless, as the upswing has only happened yesterday, more data is required to confirm the change in trend. A further break of the 10-day SMA resistance, currently at 1,771, will give a more confirmed near term reversal which will see the FBMKLCI running towards the 1,800-point psychological barrier.
Overnight, the Dow fell 268.05 or -1.51% to close at 17,533.15. Today, the FBMKLCI is likely to trade within a range of 1,710 to 1,798.
This week's expected range: 1689 – 1851
Today’s expected range: 1710 – 1798
Resistance: 1776, 1787, 1798
Support: 1710, 1721, 1743
Stocks to watch: AXIATA, BJFOOD, GHLSYS, HARTA, IFCAMSC, L&G, MEGB, MAXIS, MYEG, OPENSYS, PRDUREN, SMRT, UCHITEC, YGL, YTL
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