FBM KLCI - breakout from consolidation
Stocks
on Bursa Malaysia closed higher yesterday, lifted by gains in consumer
and Petronas-linked stocks, after the bourse re-opened for trading
following a two-day break and a rebound in global oil prices. The
benchmark FBM KLCI rose 21.76 points or 1.22% to close at 1,803.02
points, after moving between 1,801.09 points and 1,831.41 points
throughout the day. Gainers outpaced decliners by 467 to 399, while 318
counters were unchanged. Total turnover increased to 2.41 billion shares
valued at RM2.69 billion from last Friday’s 1.91 billion shares valued
at RM2.21 billion.Taking cue from the strong performance on Wall Street overnight, the FBM KLCI opened higher with an upside gap 33.46 points at 1,814.72 and surged to hit the intra-day high of 1,831.41 two minutes after opening, making a gain of 50.15 points at its best. However, heavy profit-taking dragged the key index lower from its intra-day high for the rest of the day to hit the intra-day low of 1,801.09 just before closing, and some late buying lifted the index to close off low. Chart-wise, the FBM KLCI formed a bearish black shooting-star candlestick, a pattern which indicates heavy distribution on the day. Hence, the FBM KLCI is likely to further consolidate to digest the profit-taking pressure. Immediate downside support zone is at 1,801 to 1,790, while the overhead resistance zone is at 1,810 to 1,831.
MACD hooked upward and its histogram also extended upward after contracting for three consecutive bars, indicating resumption in the upward momentum after a brief consolidation. RSI (14) swung upward strongly to 62.4 from 55.9, indicating a changed in momentum to the upside and the relative strength of the FBM KLCI is turning bullish from a mildly bullish state. Stochastic, however, was lower at 68.9 from 73.3, indicating the key index is still in a consolidation mode. Readings from the indicators showed that the FBM KLCI was showing signs of turning bullish amid profit-taking consolidation.
With the strong upsurge yesterday, the technical picture of the FBM KLCI has changed slightly to the bullish side where the short term trend of the FBM KLCI has turned upward from a consolidation mode last week, and the medium term trend has turned upward with the 20-day SMA making a golden-cross over the 50-day SMA, and the key index is closing firmly above the 100-day SMA. Hence, the FBM KLCI is likely to trend higher to challenge the overhead resistance zone formed by the cluster of long term moving averages with the 200 and 240-day SMA forming the upper barrier at 1,833-point level. A breakthrough of the current overhead resistance zone at 1,810 to 1,833 will see the FBM KLCI turning bullish again with a possibility of re-testing the all-time high level of 1,896.23 and the 1,900-point target in the medium to longer term.
Overnight, the Dow rose 6.62 points or 0.04% to close at 17,673.02. Today, the FBMKLCI is likely to trade within a range of 1,761 to 1,861.
This week's expected range: 1739 – 1841
Today’s expected range: 1761 – 1861
Resistance: 1822, 1842, 1861
Support: 1761, 1781, 1792
Stocks too watch: ALAM, BARAKAH, ECONBHD,
FABER, IJACOBS, IFCAMSC, JAKS, MITRA, MKLAND, MUHIBAH, NIHSIN, OCK,
ORNA, OWG, PELIKAN, SALCON, SUNZEN, TGOFFS, UMSNGB, UZMA
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