Stocks on Bursa Malaysia ended marginally lower yesterday on profit-taking after two consecutive days of gains. Regional markets also pulled back with banks leading the way down as investors turned cautious ahead of central bank meetings and the release of economic data that included those from the European Central Bank and Bank of England and the US non-farm payrolls. The FBM KLCI eased 0.91 point to end at 1,650.93 after opening at 1,656.65, and hovered between 1,649.17 and 1,656.65 throughout the day. Advancers led decliners by 378 to 305, with 298 counters unchanged. Total volume dropped to 842.01 million shares valued at RM1.42 billion from 1.13 billion shares valued at RM1.741 billion on Wednesday.
Taking cue from the positive close on Wall Street, the FBM KLCI opened 4.81 points higher at 1,656.65 and slid lower for the whole day on profit-taking activity to touch the intra-day low of 1,649.17 before rebounding to close off low. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which indicates profit-taking correction after two consecutive days of gains, and the key index is likely to continue its correction today with immediate downside support zone at 1,649 to 1,646.
MACD and its histogram continued to climb higher, indicating a further improvement in the upward momentum. RSI (14) hooked downward to 60.8 from 61.7, reflecting the mild pullback, and the key index is still in the bullish zone. Stochastic also hooked downward slightly to 94.7 from 94.9, reflecting the pullback, but the short term up cycle is still intact. Readings from the indicators showed that the FBM KLCI is experiencing a mild correction but the positive technical picture is still intact, as such is likely to climb higher after the correction is over.
The trend of the FBM KLCI remained up. However, with yesterday's pulled back the key index has closed just below the 50-day SMA after rebounding from the 60-day SMA at 1,649. Immediate moving average support zone is at 1,649 to 1,644 provided by the 60 and 120-day SMA, and the 100-day SMA support is at 1,646. The FBM KLCI is likely to continue its uptrend after the profit taking correction is over with an upside target of 1,688, provided by the inverse Head-and-Shoulder pattern breakout.
Overnight, the Dow rose 33.25 points or +0.23% to close at 14,329.49, the third straight record high. Today, the FBM KLCI is likely to trade within a range of 1,640 to 1,664
This week's expected range: 1604 – 1661
Today’s expected range: 1640 – 1664
Resistance: 1655, 1660, 1664
Support: 1640, 1644, 1647