FBMKLCI

Stocks on Bursa Malaysia ended mixed on Wednesday, the last trading day of April, as cautious sentiment clouded the market ahead of the outcome of the US Federal Reserve's two-day meeting which ends later on the day, against a backdrop of continuing tension in Ukraine. However, the FBMKLCI rose 12.18 points or 0.7% to 1,871.52 on government fund buying. Losers led gainers by 419 to 362 while 325 counters were unchanged. Turnover was lower at 1.5 billion shares, worth RM2.5 billion, from Tuesday’s 2.5 billion shares worth RM2.2 billion. Bursa Malaysia was closed yesterday for the May 1st Labour Day holiday.

The FBMKLCI opened 0.02 of a point lower at 1,859.32 and slipped to the intra-day low of 1,857.07 within the first ten minutes after opening. The key index rebounded from the low and climbed higher gradually for the rest of the day with bouts of pullback on mild profit-taking, and a last minute buying on selected heavyweights help pushed the index to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white candlestick which confirmed the reversal signal issued by the bullish white piercing-line candlestick pattern formed on the previous day. Hence, the FBMKLCI is likely to move higher today if the buying momentum continues. Immediate overhead resistance zone is at 1,872.52 to 1,882.2, while the downside support zone is at 1,857 to 1,952.

MACD hooked upward but is still below the signal-line, indicating the rise in the key index could be just a technical rebound until a golden-cross signal is seen. RSI (14) was higher at 63.8 from 56.4, indicating the short term relative strength of the key index has again turned bullish. Stochastic hooked upward to 65.4 from 52.2, and has made a golden-cross over the slow stochastic line, indicating a bullish reversal of the short term cycle from down to up. Readings from the indicators showed that the FBMKLCI is staging a bullish reversal and the key index is likely to move higher on follow through buying momentum.

With the strong upward move on Wednesday, the trend of the FBMKLCI has again turned up as the key index is now staying above all the short, medium and long term moving averages. The FBMKLCI is now just 10.68 points below its all-time high of 1,882.2 registered on 31st December, 2013; and a breakout from this all-time high level will see the FBMKLCI moving higher to the next target of 1,900 in the short to medium term. On the broader market, the small-cap and penny stocks are likely to continue with their consolidations after the recent strong pullback which caused a bearish outlook in some of the penny stocks.