Stocks on Bursa Malaysia closed lower in a quiet market on Monday, on lack of buying interest before the Deepavali holiday which falls on Tuesday. The local bourse was dampened by telecommunications stocks with the FBM KLCI falling 3.49 points or 0.21% to 1637.59 after hovering between 1,636.65 and 1,640.78. Losers led gainers by 390 to 225, while 317 counters were unchanged. Volume rose to 780 million shares worth RM1.03 billion from Friday’s 777.107 million shares valued at RM1.32 billion.
The FBM KLCI opened 0.79 points lower at 1,640.29 and slipped lower, it rebounded to the intra-day high of 1,640.78 before slipping to the intra-day low of 1,635.65, it was staying in the negative territory throughout the day. Chart-wise, the FBM KLCI formed a small black candlestick which indicates consolidation, and is likely to further consolidate within a range of 1,632 to 1,645.
MACD continued to slide lower below the zero-line, and its histogram further extended southward, indicating an increased in the bearish momentum. RSI (14) was lower at 35.4 from 37.6, indicating a further loss in the short term relative strength, and the key index dipped deeper into the bearish zone. Stochastic has again hooked downward to 16.6 after rebounding to 18.7 on Friday, indicating a resumption of the bearish momentum. Readings from the indicators showed that the FBM KLCI is currently weak and bearish, and is likely to extend its consolidation.
The short and medium term trend of the FBM KLCI is currently down and bearish as the key index is staying below the short and medium term moving averages. The longer term trend is still up at the moment as the key index is still closing above the long term moving averages. However, the long term trend will be subjected to test soon as it is sitting on the 100-day SMA which is now at 1,637, and the FBM KLCI is also sitting right on the lower supporting trend line of the uptrend channel. A break below the 100-day SMA, the support trend line and the pivot low of 1,632-point, will see the key index sliding lower towards the critical long term 120-day SMA support which is currently at 1,625-point. The next lower support zone is at 1,627 to 1,615 being the 61.8% and 76.4% Fibonacci retracement level.
Overnight, the Dow fell 58.90 points or -0.46% to close at 12,756.18. Today, the FBM KLCI is likely to trade within a range of 1,631 to 1,645.
This week's expected range: 1602 – 1685
Today’s expected range: 1631 – 1645
Resistance: 1640, 1642, 1645
Support: 1631, 1634, 1635