Stocks on Bursa Malaysia ended lower yesterday on continued selling in selective heavyweights. Regionally, most of the Asian stock markets were traded higher, as investors reacted positively to the People’s Bank of China’s move to lower the one-year deposit rate by 25 basis points to 2.5% and the one-year lending rate to 5.35%. The FBM KLCI slipped 4.08 points or 0.22% to close at 1,817.13, after moving between 1,812.35 and 1,825.33 points throughout the day. Losers outpaced gainers by 617 to 313 with 260 counters unchanged. Total volume rose to 2.3 billion shares worth RM2.2 billion from 2.2 billion shares worth RM2.7 billion on Friday.
The FBM KLCI opened 1.7 points higher at 1,822.91 and surged to hit the intra-day high of 1,825.33 briefly after opening, but the upward move could not sustained and the key index fell on selling pressure for the rest of the day with mild intermittent rebound. The FBM KLCI hit the intra-day low of 1,812.35 at late afternoon before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a bearish black spinning-top-like candlestick which indicates the bears were in control for the day and the key index was in consolidation mode as the index continued to move within the previous day’s range. Hence, the FBM KLCI is likely to further consolidate today. Immediate overhead resistance zone is at 1,825 to 1,831, while the downside support zone is at 1,812 to 1,804.
MACD hooked downward and made a dead-cross over the signal-line, indicating a loss in momentum and a sell signal. RSI (14) hooked downward to 60.9 from 63.7, indicating a loss in the relative strength to the weaker side of the bullish zone. Stochastic, however, continued to rise to 89.6 from 84.9, indicating the short term up cycle is still intact. Readings from the indicators showed that the FBM KLCI is in a consolidation mode.
The short and medium term trend of the FBM KLCI is up as the key index continued to stay above the short and medium term moving averages. The long term trend has turned sideways as the long term moving averages are turning flat. For today, the FBM KLCI is likely to stay in sideways range-bound consolidation within a range of 1,811 to 1,825, and a breakout on either side of the range will see the FBM KLCI continue to move in the direction of the breakout. On the broader market, rotational play on small caps and ACE market counters is likely to continue as the volume continue to stay around the two billion shares level.
Overnight, the Dow rose 155.93 points or 0.86% to close at a fresh record high of 18,288.63. Today, the FBMKLCI is likely to trade within a range of 1,798 to 1,838.
This week's expected range: 1788 – 1846
Today’s expected range: 1798 – 1838
Resistance: 1824, 1831, 1838
Support: 1798, 1805, 1811
Stocks to watch: CAMRES, CANONE, CME, FAJAR, FUTUTEC, IBHD, IJMLAND, KPJ, MYEG, NOVAMSC, NTPM, PASDEC, PWROOT, PRIVA, PUC, SEM, SENDAI, STAR, WINTONI, XINQUAN
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