Stocks on Bursa Malaysia closed on a mixed note yesterday, amid weaker performances on most regional stocks as Asian markets fell over investor concern over the global economic outlook. However, gains in selected consumer and finance stocks helped limit the losses. The FBM KLCI, which opened at 1661.7, fell 1.42 points to end at 1,656.54, after hovering between 1,652.67 and 1,664.39 throughout the day. Advancers led decliners by 420 to 296, with 283 counters unchanged. Total volume rose to 931.93 million shares valued at RM1.72 billion from Monday's 856.45 million shares valued at RM1.71 billion.
Taking cue from the strong performance of the Dow overnight, the FBM KLCI opened with an upside gap of 3.74 points higher at 1,661.70 and surged to the intra-day high of 1,664.39 within the first twenty minutes of trading, and the key index slid on profit-taking activity for the rest of the day to the intra-day low of 1,652.67 before rebounding to close off low. Chart-wise, the FBM KLCI formed a bearish black spinning-top candlestick and a dark-cloud-cover pattern, a top reversal candlestick pattern, indicating uncertainty of market direction with a bearish bias amid profit-taking after hitting the resistance zone of 1,660 to 1,675. Hence, the FBM KLCI is likely to continue to slide lower to consolidate today. Immediate downside support zone is at 1,652 to 1,649 while the overhead resistance zone is at 1,664 to 1,675, with 1,660 being the 61.8% Fibonacci retracement level.
MACD was higher, but its histogram contracted for the first time after expanding continuously for thirteen bars, and this indicated a reduction in the upward momentum. RSI (14) hooked downward slightly to 63.4 from 64.8, reflecting the mild pullback in the key index, but the short term relative strength is still in the bullish zone. Stochastic hooked downward slightly and has crossed below the slow stochastic line, indicating the possible beginning of a correction phase. Readings from the indicators showed that the FBM KLCI is losing its upward momentum, and is poised for a correction or consolidation.
The short term trend of the FBM KLCI remained up as the key index is staying above the 5 and 10-day SMA, while the medium term trend is sideways as the 10 and 20-day SMA is still trapped between the medium and long term moving averages. Nevertheless, the long term uptrend still remained intact. After running up for fourteen sessions from the low of 1,599.94 on 21st February, the FBM KLCI may pause for a breather before continuing its uptrend to challenge the higher targets. The correction, nevertheless is likely to be shallow with strong downside support zone at 1,650 to 1,623 provided by the cluster of moving averages.
Overnight, the Dow rose 2.77 points or +0.02% to close at 14,450.06. Today, the FBM KLCI is likely to trade within a range of 1,639 to 1,676.
This week's expected range: 1598 – 1690
Today’s expected range: 1639 – 1676
Resistance: 1663, 1669, 1676
Support: 1639, 1646, 1651