Stocks on Bursa Malaysia closed on a weaker note yesterday on profit-taking, with losses mostly seen in consumer stocks and selected heavyweights. The FBM KLCI ended 2.32 points or 0.13% lower at 1,774.42 after moving between 1,778.64 and 1,772.38 throughout yesterday. Losers trounced gainers by 507 to 330, with 283 counters unchanged. Volume rose to 2.22 billion units valued at RM2.14 billion from 2.1 billion units worth RM2.21 billion on Tuesday.
The FBM KLCI opened 0.55 of a point lower at 1,776.19 and rebounded to the intra-day high of 1,778.64 at late morning in slow trade. The key index retreated in the afternoon session and fell to the intra-day low of 1,772.38 at late afternoon before rebounding to close off low. Chart-wise, the FBM KLCI formed a bearish black spinning-top candlestick which indicates uncertainty of market direction with a downward bias. The appearance of a black spinning-top candlestick after a strong rebound on Tuesday also indicate the market was reluctant to buy further and profit-taking has set in, and hence, the FBM KLCI is likely to further consolidate itself. Immediate downside support is at 1,765 while the overhead resistance is at 1,781.
MACD continued to slide lower, while the histogram further contracted, indicating a reduction in the bearish momentum and a state of consolidation. RSI (14) hooked downward to 57.7 from 58.9, indicating a mild pullback, and the key index is still in the mildly bullish state. Stochastic hooked upward to 24.6 from 18.9, indicating a mild rebound after hitting the oversold zone. Readings from the indicators showed that the FBM KLCI is likely to further consolidate itself and move sideways range-bound.
The medium to longer term trend of the FBM KLCI is still up, but the short term trend has turned sideways range-bound, and is likely to continue moving within its immediate range of 1,765 to 1,795. A break of either side of the range will likely see the key index continue moving in that direction. As of now, one month after GE13, the FBM KLCI has been trading within a sideways range, and is looking tired. Hence, the key index is likely to slide lower and will eventually close the gap formed on May 6.
Overnight, the Dow fell -216.95 points or -1.43% to close at 14,960.59. Today, the FBM KLCI is likely to trade within a range of 1,765 to 1,785.
This week's expected range: 1739 – 1808
Today’s expected range: 1765 – 1785
Resistance: 1777, 1781, 1785
Support: 1765, 1768, 1771