Stocks on Bursa Malaysia closed on a weaker note yesterday in moderate trading on profit-taking in most consumer stocks. On the regional front, the Asian bourses were traded mixed as concerns over China’s economic outlook weighed on appetite for growth-linked assets. The FBM KLCI, which opened at 1,645.83, fell 5.48 points or 0.33% to end at 1,640.74 after hovering between 1,635.87 and 1,645.83 throughout the day. Decliners led advancers by 344 to 321, with 334 counters unchanged. Total volume rose to 788.2 million shares valued at RM1.6 billion from 766.76 million shares valued at RM1.65 billion on Wednesday.
The FBM KLCI opened 0.39 of a point lower at 1,645.83, the intra-day high, and plunged to the intra-day low of 1,635.87 within the first fifteen minutes of trading. It rebounded and moved upward gradually to recover some lost ground but was hovering in the negative territory throughout the day. Chart-wise, the FBM KLCI formed a black hammer-like candlestick which closed at the mid-range of the day, indicating supply and demand was almost equal, and the key index may continue to consolidate today with a downside support zone at 1,635 to 1,630, while the overhead resistance zone is at 1,645 to 1,653.
MACD and its histogram continued to slide lower, indicating a further loss in the momentum. However, as MACD is still above the signal-line, current weakness is being viewed as a technical correction in an uptrend. RSI (14) plunged below the 50-level at 49.8 from 54, indicating the short term relative strength of the FBM KLCI has just turned from mildly bullish to mildly bearish. Stochastic was lower at 69.2 from 84.8, indicating a further weakening of the index and continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is undergoing a correction and is turning mildly bearish. Hence, the FBM KLCI is likely to further consolidate.
The immediate short term trend of the FBM KLCI has turned down, as the index is now closing below the 5 and 10-day SMA but is still above the 20 and 30-day SMA. At the same time, the key is also closing below the 50, 60 and 120-day SMA but is still above the 200 and 240-day SMA. Hence, the FBM KLCI is likely to go into a sideways range-bound consolidation mode with immediate downside critical support at 1,632 provided by the 30 and 200-day SMA, while the strong overhead resistance is expected at 1,650-point level exerted by the 50 and 60-day SMA. A break of either side of the range-bound zone will see the FBM KLCI moving further in that direction.
Overnight, the Dow rose another 83.86 points or +0.58% to close at a fresh record high of 14,539.14. Today, the FBM KLCI is likely to trade within a range of 1,625 to 1,655.
This week's expected range: 1598 – 1690
Today’s expected range: 1625 – 1655
Resistance: 1645, 1650, 1655
Support: 1625, 1630, 1635
Stocks to watch: CCM, GLOMAC, JETSON, KSL, MUHIBAH, NAIM, TAMBUN, TEBRAU, UEMLAND