Stocks on Bursa Malaysia closed easier yesterday on profit-taking. The performance of the local bourse was in sync with several regional peers as positive sentiments were hampered by weak export data from Japan, and also dampened by Wall Street’s weak performance last Friday on poor corporate earnings. The FBM KLCI was 4.4 points or 0.26% lower at 1,661.95 after opening 0.08 point higher at 1,666.35. The benchmark index hovered between 1,660.04 and 1,667.23 throughout the trading session. Losers led gainers by 407 to 259, with 336 counters unchanged. Volume declined to 1.28 billion shares worth RM1.46 billion from 1.379 billion shares valued at RM2.186 billion last Friday.
The FBM KLCI opened 0.08 point higher at 1,666.43 and surged to the intra-day high of 1,667.23 within the first five minutes of trading. The benchmark index fell on heavy profit-taking to the intra-day low of 1,660.04 after half an hour, and it rebounded to 1,665.46 at midday but afternoon saw another round of sell down to end near the day's low. Chart-wise, the FBM KLCI formed a bearish black candlestick which served to confirm the top reversal signal issued by the inverted hammer formed last Friday, and the key index is likely to further consolidate itself today. Immediate downside support is at 1,659 provided by the 10-day SMA.
MACD hooked downward slightly and the histogram contracted for the first time after three days of expansion, indicating a slowdown in the index's momentum. RSI (14) pulled back to 59.9 from 64.3, indicating the short term relative strength has turned weaker to mild bullish from bullish. Stochastic hooked down gently to 84.2 from 86.2, but is still above the slow stochastic line, reflecting the pullback in the key index. Readings from the indicators showed that the FBM KLCI is undergoing a technical correction, but the underlying strength is still bullish.
The overall trend of the FBM KLCI is up, while yesterday's pullback has seen the key index tested the support of the 5-day SMA which is currently at 1,661.58, and an immediate support by the 10-day SMA is now at 1,659.39. A further break of this support level would likely see the key index sliding lower to the 1,650-point psychological support level which match with the 20-day SMA support. Strong overhead resistance zone is at 1,668 to 1,670. Overall volume remained lukewarm, and the active scene is likely to be dominated by continued rotational play on the second and third liners.
Overnight, the Dow rose 2.38 points or +0.02% to close at 13,345.89. Today, the FBM KLCI is likely to trade within a range of 1,651 to 1,674.
This week's expected range: 1632 – 1691
Today’s expected range: 1651 – 1674
Resistance: 1666, 1670, 1674
Support: 1651, 1655, 1658
Stocks to watch: MAA, ORNA, FABER, HAIO, MEDIAC, KEURO, MEGB