Stocks on Bursa Malaysia ended marginally lower yesterday, prompted by profit-taking activities in selected blue chips following recent gains. The benchmark FBM KLCI was 1.6 points or 0.10% lower at 1,673.07. Losers led gainers by 353 to 342, while 342 counters were flat. Volume turnover rose to 1.59 billion shares valued at RM1.69 billion from 1.11 billion shares valued at RM1.17 billion on Tuesday.
The FBM KLCI opened 1.52 points higher at 1,676.19 and slid lower for most part of the day to the intra-day low of 1,670.11. It rebounded strongly at late afternoon to hit the intra-day high of 1,676.86 before a last minute sell down which sent the key index back to end at the negative territory. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick which is a reversal candlestick pattern. When the last three days price action and candlestick formation is taken into consideration, it shows price congestion or distribution at current level. Hence, the FBM KLCI is likely to further consolidate itself within a range of 1,669 to 1,679. Critical immediate support is at 1,669, and a break of this support level is likely to see the benchmark index sliding lower to test the 10-day SMA support at 1,667.
MACD was flat, but the histogram contracted after four sessions of expansion, indicating a slowdown in the upward momentum. RSI (14) hooked downward slightly to 65.7 from 67.8, reflecting the mild pullback correction. Nevertheless, the key index is still in the bullish zone. Stochastic was lower at 80.3 from 86.2, and has crossed below the slow stochastic line, confirming the beginning of a short term down cycle or consolidation. Readings from the indicators showed that the FBM KLCI is losing its upward momentum and is moving into a short term consolidation phase.
The trend of the FBM KLCI remained up as the key index continued to stay above all the moving averages. However, the short term uptrend may soon be subjected to test as the FBM KLCI is just one point above the 5-day SMA which is currently at 1,672.03, and a close below this level will likely see the key index further correct itself to the next lower SMA support at 1,667 provided by the 10-day SMA. Total volume has increased to 1.5 billion shares contributed mainly by the penny stocks, and rotational play on the lower liners is likely to continue while the blue-chip stocks consolidate.
Overnight, the Dow fell a marginal 10.75 points or -0.08% to close at 13,096.46. Today, the FBM KLCI is likely to trade within a range of 1,663 to 1,684.
This week's expected range: 1648 – 1685
Today’s expected range: 1663 – 1684
Resistance: 1677, 1680, 1684
Support: 1663, 1666, 1669
Stocks to watch: COASTAL, SCOPE, TAKASO, MRCB, WCT