Stocks on Bursa Malaysia ended on an easier note yesterday, in line with regional stock markets as concern over the European debt crisis grew further, as investors were concerned about market talk that the crisis could move to Germany. The FBM KLCI fell 1.02 points or 0.06% to close at 1,647.11, despite opening 0.11 of a point better at 1,648.24. Losers led gainers by 460 to 276, while 357 counters were unchanged. Total turnover declined to 1.21 billion shares worth RM1.11 billion, from 1.24 billion shares worth RM1.07 billion registered on Monday.
The FBM KLCI opened 0.11 point higher at 1,648.24 and moved sideways in a narrow range. It hit the intra-day high of 1,649.00 at late morning before slipping downward on selling pressure to hit the intra-day low of 1,645.58, and some last minute buying of selected blue-chips helped lift the key index to close off low. Chart-wise, the FBM KLCI formed a small black spinning-top candlestick which indicates consolidation with a bearish bias. As the key index charted a lower low yesterday, it indicated a short term downtrend has formed, and the FBM KLCI is likely to extend the downward move.
MACD and its histogram continued to slide southward, indicating an increased in the bearish momentum. RSI (14) was lower at 59.3 from 60.7, indicating a continued loss in the short term relative strength and entering of the key index into the mildly bullish zone from bullish zone before. Stochastic continued to slide lower to 70.4, indicating continued loss in market strength and a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is in a bearish mood, and the consolidation process is likely to extend.
The immediate short term trend of the FBM KLCI has turned bearish as it is now closing below the 5 and 10-day SMA, and is likely to slide southward towards the 20 and 30-day SMA support at 1,640-point level. A break of the 1,640-point support level will likely see the FBM KLCI goes into a deeper correction with a downside target of 1,620. Meanwhile, the medium to long term uptrend is still intact. Immediate downside support zone is at 1,645 to 1,640, while the overhead resistance zone is at 1,650 to 1,655.
Overnight, the Dow lost -21.68 points or -0.17% to close at 13,102.99. Today, the FBM KLCI is likely to trade within a range of 1,642 to 1,653
This week's expected range: 1635 – 1665
Today’s expected range: 1642 – 1653
Resistance: 1649, 1651, 1653
Support: 1642, 1643, 1645