Stocks on Bursa Malaysia closed slightly lower yesterday on late profit-taking amid mixed performances on the regional bourses, where Japan’s Nikkei 225 surged 358.95 points to 13,192.59, while Hong Kong’s Hang Seng slipped 8.85 points to 21,718.05 and Singapore’s Strait Times Index fell 15.17 points to 3,284.61. The FBM KLCI fell 0.66 point or 0.04% to close at 1,687.99, after opening 3.02 points higher at 1,691.67. It moved within a range of 1,683.59 and 1,692.06. Advancers trumped decliners by 472 to 268, with 274 counters unchanged. Turnover increased to 1.073 billion shares worth RM1.824 billion from 974.348 million shares worth RM1.973 billion last Friday.
The FBM KLCI opened with an upside gap of 3.02 points at 1,691.67 and slipped to the intra-day low of 1,683.59 within the first forty minutes of trading. The key index rebounded and climbed to touch an intra-day high of 1,692.06 before pulling back on profit-taking to move sideways range-bound. Chart-wise, the FBM KLCI formed a bearish hangman candlestick in dark-cloud-cover position, in which both formations indicated profit-taking activity. Hence, the FBM KLCI is likely to continue to correct downward or consolidate today. Immediate downside support zone is at 1,683 to 1,678, while the overhead resistance zone is at 1,692 to 1,700.
MACD continued to climb higher but its histogram further contracted, indicating a reduction in the upward momentum, and weakness is developing. RSI (14) hooked down to 70.2 from 70.8, reflecting the mild losses, and the short term relative strength is still in the very bullish or overbought zone, and a correction is imminent. Stochastic slipped lower to 85.3 from 87.3, indicating a loss in the momentum, and a down cycle is developing. Readings from the indicators showed that the FBM KLCI is losing its upward momentum and is in a consolidation mode.
The overall trend of the FBM KLCI remained up. However, the immediate short term trend is under test now as the key index has pierced through the 5-day SMA yesterday but rebounded to closed just slightly above it. A further break of the 5-day SMA, which is currently at 1,687.10 will likely see the FBM KLCI slipping lower to the 10-day SMA support at 1,676. The candlestick formation over the last four sessions showed that the FBM KLCI is currently congesting in a range of 1,678 to 1,700, and the shadows of the candlesticks indicated distribution is going on at current level. Hence, the FBM KLCI is likely to stay range-bound with a downward bias.
Overnight, the Dow rose 48.23 points or +0.33% to close at 14,613.48. Today, the FBM KLCI is likely to trade within a range of 1,675 to 1,700.
This week's expected range: 1605 – 1715
Today’s expected range: 1675 – 1700
Resistance: 1692, 1696, 1700
Support: 1675, 1679, 1683
Stocks to watch: ADVENTA, FITTERS, MFM, PERISAI, SCOMI, SPSETIA, TAMBUN, TDM, VERSATL, WTK