Stocks on Bursa Malaysia closed lower yesterday in cautious trading on mild profit-taking, with losses seen in selected heavyweights. The barometer index FBM KLCI fell 4.82 points or 0.27% to close at 1,769.6 after a day of "see-saw" trading. The key index moved between 1,777.74 and 1,767.23 throughout the day. Losers led gainers by 593 to 268, with 265 counters unchanged. Volume fell to 1.89 billion units valued at RM2.32 billion from 2.22 billion units valued at RM2.14 billion on Wednesday.
Despite the weak performance of Wall Street overnight, the FBM KLCI opened 0.93 of a point higher at 1,775.35 and climbed higher to hit the intra-day high of 1,777.74 within the first fifteen minutes of trading. However, the key index could not sustained the rise and fell on profit-taking pressure to the intra-day low of 1,767.23 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates sellers were dominant for the day, and hence, is likely to continue to consolidate. Immediate downside support is at 1,765 while the overhead resistance is at 1,780.
MACD continued to slide lower, and its histogram also expanded southward, indicating an increase in the bearish downward momentum. RSI (14) slipped lower to 55 from 57.7, indicating a further loss in the short term relative strength of the key index in the mildly bullish zone. Stochastic, however, continued to rise to 28.1 from 24.5, and has made a golden-cross over the slow stochastic line, issuing a buy signal. Mixed signals from the indicators showed that the FBM KLCI is still in a consolidation mode, and the consolidation is likely to extend.
The short term trend of the FBM KLCI is sideways range-bound as the key index continued to move within a range of 1,765 to 1,795. Nevertheless, the medium to longer term trend still remained up. The FBM KLCI is currently forming a small round-top chart pattern, indicating gradual loss in momentum amid distribution of shares. The immediate downside support at 1,765 is especially critical as a break will see the key index sliding lower to the next support level of 1,752 follow by 1,743.
Overnight, the Dow rose 80.03 points or +0.53% to close at 15,040.62. Today, the FBM KLCI is likely to trade within a range of 1,754 to 1,788.
This week's expected range: 1739 – 1808
Today’s expected range: 1754 – 1788
Resistance: 1775, 1782, 1788
Support: 1754, 1761, 1765