Stocks on Bursa Malaysia ended easier yesterday, weighed by mild profit-taking in selective index-linked and construction counters. The FBM KLCI fell 2.73 points or 0.15% to close at 1,774, after hovering between 1,769.17 and 1,783.57 throughout the day. Losers outpaced gainers by 423 to 391 while 266 remained unchanged. Volume increased to 2.34 billion shares worth RM2.85 billion from 2.30 billion shares worth RM4.06 million on Tuesday.
Taking cue from the strong performance of Wall Street overnight, the FBM KLCI opened 5.17 points higher at 1,781.90 and surged to the intra-day high 0f 1,783.57 within the first minute of trading, and profit-taking activity set in which pushed the key index lower to hit the intra-day low of 1,769.17 before rebounding to close off low. Chart-wise, the FBM KLCI formed a bearish dark-cloud-cover candlestick pattern, a top reversal candlestick pattern which indicates profit-taking activity, and hence, the key index may continue to correct or consolidate today. Immediate downside support zone is at 1,769 to 1,757, while the overhead resistance zone is at 1,783 to 1,790.
MACD and its histogram continued to climb higher, indicating a continuation of the upward momentum. RSI (14) hooked downward to 74.8 from 76.3, reflecting the mild pullback in the key index, but the index is still in a very bullish or overbought state. Stochastic hooked upward to 58.4 from 53.2, and is crossing the slow stochastic line. Readings from the indicators showed that the FBM KLCI is still in a very bullish state, but correction have set in, and the key index is likely to further consolidate.
The trend of the FBM KLCI remained up and bullish. However, for the short term, the key index is overbought as it move up too much in a short period of time, and this is likely to attract more profit taking activity which will send the index lower to cover the gap formed on Monday, May 6. Nevertheless, a correction of the key index offer an opportunity to buy quality shares at lower price level as after the correction is over, the index is likely to re-test its recent high.
Overnight, the DJIA rose 48.92 points or +0.32% to close at 15,105.12. Today, the FBM KLCI is likely to trade within a range of 1,753 to 1,797.
This week's expected range: 1718 – 1826
Today’s expected range: 1753 – 1797
Resistance: 1782, 1790, 1797
Support: 1753, 1761, 1767
Stocks to watch: CLIQ, CLIQ-WA