Stocks on Bursa Malaysia closed mixed yesterday after a two-day break, with the benchmark FBM KLCI erasing gains after rising to a new high of 1,655.39 in morning trading. Overall there was less activity as investors are still away on holiday after the Hari Raya festival. The FBM KLCI finished 2.46 points better at 1,652.25 after opening 2.43 points higher at 1,652.22 and fluctuated between 1,649.59 and 1,655.39 throughout the day. Losers led gainers by 399 to 379 while 301 counters were unchanged. Turnover decreased to 1.353 billion shares worth RM1.623 billion from 1.481 billion shares worth RM1.645 billion registered last Friday.
The FBM KLCI opened 2.43 points higher at 1,652.22 and surged to a new all-time intra-day high of 1,655.39 within the first two minutes of trading and retraced on profit-taking. The key index attempted to re-test the 1,655 resistance level but failed to breakthrough and slipped to the intra-day low of 1,649.59 before rebounding to close off low at 1,652.25. Chart-wise, the FBM KLCI formed a Doji candlestick which indicates a standoff between the bulls and bears after a day of battle and hence uncertainty of market direction. The appearance of Doji at this high level showed that the market is reluctant to move high and faced strong resistance at level near 1,655. The four candlestick formation since last Wednesday indicated that the market barometer is toppish at this level, and a correction is expected ahead.
MACD was flat but its histogram further contracted, indicating a continued loss in the barometer’s momentum. RSI (14) hooked upward slightly to 66.3 from 64.3, reflecting the mild gain in the key index, and the index is still in the bullish zone. Stochastic, however, continued to slip lower to 85.8, indicating consolidation and loss of market strength. Mixed signals from the indicators showed that the FBM KLCI is going into a consolidation mode.
The underlying trend of the FBM KLCI remained up and bullish as the key index continued to stay above all the short, medium and long term moving averages. The benchmark index is at a peak level now and was congested within a tight range over the last four trading sessions which is a sign of distribution, and hence, a correction is imminent.
Overnight, the Dow fell -30.82 points or -0.23% to close at 13,172.76. Today, the FBM KLCI is likely to trade within a range of 1,643 to 1,661.
This week's expected range: 1634 – 1665
Today’s expected range: 1643 – 1661
Resistance: 1655, 1658, 1661
Support: 1643, 1646, 1649
Stocks to watch: WCT, CENBOND, GUH