Stocks on Bursa Malaysia closed last Thursday with minor changes amid volatile trading throughout the day, weighed by a mixed market sentiment as most market players stayed on the sidelines ahead of the long weekend, with Friday being the Federal Territory Day holiday. The FBM KLCI ended 0.18 of a point lower at 1,627.55, after opening 0.4 of a point better at 1,628.13, while on a weekly basis, the FBM KLCI slid 9.58 points to 1,627.55 on Thursday from 1,637.13 the previous Friday. Market breadth was negative with losers leading gainers by 412 to 266, while 343 counters were unchanged. Volume eased to 1.074 billion shares valued at RM2.013 billion from Wednesday's 1.154 billion shares worth RM2.002 billion; and weekly turnover declined to 3.368 billion units, worth RM5.681 billion, from previous week's 5.29 billion units, worth RM8.18 billion.
Last week was a short trading week for Bursa Malaysia with only three trading days as Monday and Friday was public holiday for Thaipusam and Federal Territory day. The FBM KLCI opened last Tuesday 7.89 points higher at 1,645.02 but ended only 0.21 of a point better at 1,637.34 amid heavy profit-taking. Heavy sell-down on key heavyweights appeared at late morning of Wednesday saw the FBM KLCI plunging to an intra-week low of 1,613.17 within half an hour, losing 24.17 points at its worst before rebounding to close 9.61 points or 0.59% lower at 1,627.73, after opening 1.85 points higher at 1,639.19. The benchmark index closed almost unchanged on Thursday after moving between 1,622.52 and 1,631.86. On the weekly chart, the FBM KLCI formed a fourth bearish black candlestick which indicates continuation of the downtrend which started four weeks ago, and the key index is likely to continue its current downtrend to further consolidate itself this week. On the daily chart, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction but with a downward bias, and the key index is likely to continue to consolidate itself. Immediate downside support zone at 1,613 to 1,602, while the overhead resistance zone is at 1,647 to 1,651.
Weekly MACD and its histogram continued to slide lower after making a dead-cross the previous week, indicating a pickup in the weekly bearish momentum. Daily MACD also continued to slide lower, but its histogram further contracted upward, indicating a slowdown in the daily bearish momentum. Weekly RSI (14) was lower at 46.5 from 48.8, indicating a further weakening of the weekly relative strength, while the daily RSI (14) was just marginally lower at 31.9 from 32 before, and is still in the bearish zone. Weekly Stochastic was lower at 51.7 from 68.6, indicating a continuation of the weekly down cycle, and daily Stochastic had crossed below its slow stochastic line, indicating an end to the recent technical rebound and the resumption of the daily down cycle. Readings from both the weekly and daily indicators showed that the FBM KLCI is still generally weak and bearish, and is likely to head for more consolidation.
The short and the medium term trend of the FBM KLCI remained down and bearish, while the long term uptrend is still intact, but is being challenged now. From the study of Elliott Wave on the daily chart, the FBM KLCI has just completed its corrective wave-B, and the downward impulse wave-C has just unfolded itself. Hence, the FBM KLCI is likely to slip lower to re-test the lower support zone of 1,613 to 1,602, and a break of the psychological support of 1,600-point will see the key index moving lower to re-test the pivot low of 1,590 follow by a probable downside target of 1,549 and 1,488.
Last Friday, the Dow rose +149.21 points or +1.08% to close at 14,009.79. This week, the FBM KLCI is likely to trade within a range of 1,578 to 1,679, and today, the FBM KLCI is likely to trade within a range of 1,613 to 1,641.
This week's expected range: 1578 – 1679
Today’s expected range: 1613 – 1641
Resistance: 1632, 1637, 1641
Support: 1613, 1617, 1622
Stocks to watch: ALAM, KYM, LIONCOR, MISC