Stocks on Bursa Malaysia ended lower yesterday as the players stayed on the sidelines and shifted their interests to the international market, as investors were bearish amid lack of buying support from the local funds on key index heavyweights. The FBM KLCI fell 6.44 points or 0.40% to 1,607.88, after opening 1.26 points higher at 1,615.58. Losers outpaced gainers by 447 to 225, while 313 counters were unchanged. Volume fell to 964.23 million shares worth RM1.27 billion from one billion shares worth RM1.49 billion last Friday.
Taking cue from the strong performance of Wall Street last Friday, the FBM KLCI opened 1.26 points higher at 1,615.58 and surged to the intra-day high of 1,616.04 within the first five minutes after opening, and the key index came under selling pressure and slipped lower for the rest of the day to close near the lowest point of the day. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates heavy selling pressure for the day, and the key index is likely to continue its downtrend on further liquidation. Immediate downside support zone is envisaged at 1,602 to 1,595, where 1,602 is the 50% Fibonacci retracement level for the range measuring from the pivot low of 1,526 on 18th May 2012 to the historical high of 1,679.37 and 1,595 is the pivot low formed on September 24th.
MACD continued to slide lower and its histogram has again expanded after four sessions of contraction, indicating an acceleration in the bearish downward momentum. RSI (14) was lower at 21.1 from 23.7, indicating a very bearish short term relative strength and is oversold. Stochastic was lower at 1.9 from 3.7, indicating a very weak or oversold market and continuation of the down cycle. Readings from the indicators showed that the FBM KLCI is currently very weak, bearish and the downward momentum has again pickup, and hence is likely to sink further.
The trend of the FBM KLCI is down, and the key index fell to rest on the 200-day SMA support yesterday without sign of rebound, and hence the FBM KLCI is likely to sink further to test the critical psychological support level of 1,600-point. A further break of the psychological support level will likely see the key index falling further downward to test the long term 240-day SMA support which is currently at 1,590-point level. Nevertheless, some buying support maybe seen towards Friday as the month of November coming to a close, and some windows dressing activity in December may help to stabilise the FBM KLCI.
Overnight, the Dow fell 42.31 points or -0.33% to close at 12,967.37. Today, the FBM KLCI is likely to trade within a range of 1,596 to 1,624.
This week's expected range: 1590 – 1645
Today’s expected range: 1596 – 1624
Resistance: 1613, 1618, 1624
Support: 1596, 1602, 1605