Stocks on Bursa Malaysia dipped at the end of trading session yesterday as investors avoided riskier assets on uncertainties over the outcome of the US presidential election, with downward performance also seen in most of the regional bourses. The FBM KLCI fell 8.41 points or 0.51% to close at 1,645.63 after hovering between 1,638.18 and 1,654.39 throughout the day. Losers led gainers by 396 to 273, while 347 counters were unchanged. Volume fell to 1.267 billion shares worth RM1.66 billion from Monday's 1.124 billion shares valued at RM1.45 billion.
The FBM KLCI opened 0.24 point lower at 1,653.80 and briefly rebounded to the intra-day high of 1,654.39, and slipped lower for the rest of the morning session to the intra-day low of 1,638.18. The key index staged a mild rebound in the afternoon session to close off low. Chart-wise, the FBM KLCI formed a bearish black hammer-like candlestick which indicates some mild buying support for the key index, but was not strong enough as the rebound could not pushed through the mid-point of the day. Hence, the FBM KLCI is likely to continue to consolidate with immediate downside support at 1,638 and an overhead resistance at 1,650.
MACD and its histogram continued to slide southward, indicating an increase in the bearish momentum. RSI (14) slipped lower to 40.5 from 46.2, indicating the short term relative strength of the key index is turning bearish. Stochastic was lower at 18.1, entering the short term oversold zone, indicating a very weak market and continuation of the down cycle. However, as stochastic indicated an oversold situation, some relief rebound is likely to happen. Readings from the indicators showed that the FBM KLCI is currently weak and bearish, however, a technical rebound might take place to neutralise the oversold situation.
The short term trend of the FBM KLCI is down as the key index is staying below 5, 10, 20 and 30-day moving averages. The medium term trend is being challenge now as the FBM KLCI has just pierced through the 50 and 60-day SMA and closed right below them. The long term trend, nevertheless, is still up at the moment. The FBM KLCI has retraced more than 38.2% of the range from 1,595 to 1,679, it hit the 50% retracement level at 1,638 yesterday and rebounded off it, and the key index may consolidate at current level. However, a further break of the 1,638 level will likely see the FBM KLCI retreating to 1,627 and 1,615 level, the 61.8% and 76.4% Fibonacci retracement level.
Overnight, the Dow rose +133.24 points or +1.02% to close at 13,245.68. Today, the FBM KLCI is likely to trade within a range of 1,621 to 1,670.
This week's expected range: 1625 – 1702
Today’s expected range: 1621 – 1670
Resistance: 1654, 1662, 1670
Support: 1621, 1629, 1637