Stocks on Bursa Malaysia ended marginally easier yesterday after its earlier gains were pared down by losses in selected blue-chips and index-linked counters, as local investor sentiment was a little cautious compared to other regional markets on renewed concerns over the external economic condition. At the close, the FBM KLCI finished 0.75 of a point lower at 1,631.6, after hovering between 1,628.96 and 1,635.59 throughout the day. Gainers outpaced losers by 418 to 350, while 309 counters closed unchanged. Total turnover appreciated to 1.175 billion shares valued at RM1.868 billion from the 1.229 billion shares valued at RM1.285 billion on Monday.
The FBM KLCI opened 0.86 of a point higher at 1,633.21 and surged to the morning session high of 1,635.27 within the fist five minutes after opening, and the key index slipped to the intra-day low of 1,628.96 on profit-taking, but recovered to hit the intra-day high of 1,635.59 before last minute sell down on selected blue-chips that pushed the key index to close in the red. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction after the rebound a day earlier, and may pause to consolidate with a downward bias. Immediate overhead resistance zone is at 1,636 to 1,640 while the downside support zone is at 1,628 to 1,620.
MACD was marginally lower while the histogram was shorter upward, indicating a continued reduction in the downward momentum. RSI (14) hooked down slightly to 58.6 from 59.3, reflecting the mild pullback in the key index, while the short term relative strength is still in the mildly bullish zone. Stochastic has hooked up to 32.6 but is still below the slow stochastic line, reflecting a weak rebound. Readings from the indicators showed that the FBM KLCI is still in a consolidation mode, and will continue to stay range-bound until clear signs of breakout are seen.
The short term trend of the FBM KLCI remained in sideways range-bound as the key index is trapped in a zone with the 10-day SMA on top and the 5 and 20-day SMA below it, and a breakout in either one direction will see the key index continues to move in that direction. The longer term trend, nevertheless, still remained up. The critical support level is now at 1,620, if the level is broken, then the key index is likely to slip lower with a possible downside target of 1,608 follow by 1,601 and 1,591.
Overnight, the Dow fell -64.33 points or -0.49% to close at 13,008.68. Today, the FBM KLCI is likely to trade within a range 1,621 to 1,642.
This week's expected range: 1593 – 1666
Today’s expected range: 1621 – 1642
Resistance: 1636, 1639, 1642
Support: 1621, 1625, 1628