Stocks on Bursa Malaysia closed easier yesterday as investors continued to reduce their holdings, led by heavyweights. Meanwhile, most of the regional bourses were on positive territory. The FBM KLCI dropped 7.00 points or 0.43% to 1,620.93, dragged down by losses mostly seen in CIMB Group. CIMB, which dropped eight sen or 1.13% to RM7, pulled down the benchmark index by 1.11 points. Losers outnumbered gainers by 399 to 209 while 315 counters were unchanged. Total volume rose to 765.343 million shares worth RM929.716 million from Friday’s closing of 749.828 million shares worth RM1.193 billion.
The FBM KLCI opened 1.42 points higher at 1,629.35 and jumped to the intra-day high of 1,629.91 within the first two minutes of trading, and slipped lower throughout the day on heavy profit-taking activity to close at the intra-day low of 1,620.93. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates the bears were in full control for the day, and the key index was down for the third consecutive days. It is likely to slide lower today on continued selling pressure. Immediate downside support zone is at 1,613 to 1,597.
MACD has hooked downward, indicating a possible end of the technical rebound. RSI (14) was lower at36.7 from 40.1, indicating the FBM KLCI has again slipped into the bearish zone. Stochastic was higher at 49.9 from 45.9, indicating the short term cycle is still up. Readings from the MACD and RSI indicators showed that the FBM KLCI has again turned weak, and is likely to further consolidate with a downward bias.
The trend of the FBM KLCI has again turned down from sideways as the key index has closed below the 5 and 10-day SMA and as well as below the medium term moving averages. With the downward move yesterday, the key index has again closed below the all important 200-day SMA and is heading towards the 240 and 300-day SMA support which is currently at 1,619 and 1,597, and a further close of the key index below the 300-day SMA will officially trigger a bear market for the FBM KLCI with a possible downside targets of 1,548 and 1,488.
Overnight, the US market was closed for the Presidents Day holiday. Over in Europe, the German Dax rebounded 35.22 points to close at 7628.73. Today, the FBM KLCI is likely to trade within a range of 1,608 to 1,638.
This week's expected range: 1611 – 1647
Today’s expected range: 1608 – 1638
Resistance: 1626, 1632, 1638
Support: 1608, 1614, 1617