Stocks on Bursa Malaysia closed lower yesterday on lack of buying support amid continued weak sentiment in regional equity markets. The selling of foreign funds had put pressure on the local market, and the bearish overnight Dow Jones Index and weaker regional indices also contributed to the weak performance. The FBM KLCI ended the day at 1,775.12, down 4.45 points or 0.25%, after hovering between 1,767.3 and 1,777.4 throughout the day. Losers led gainers by 487 to 278, while 314 counters were unchanged. Volume slipped to 1.709 billion units valued at RM2.213 billion from Tuesday's 2.233 billion units valued at RM2.556.
Taking cue from the weak performance of the Dow overnight, the FBM KLCI opened 3.77 points lower with a downside gap at 1,775.80. It rebounded to hit the intra-day high of 1,777.40 but slipped lower on heavy profit-taking to hit the intra-day low of 1,767.30 at noon. The key index rebounded in the afternoon session to close near the opening price. Chart-wise, the FBM KLCI formed a black hammer candlestick, a possible bottom reversal candle pattern which indicates buying support. However, as the closing is still below the opening and day's high, the reversal signal is considered weak, and hence the FBM KLCI is likely to continue to consolidate.
MACD continued to slide lower, and its histogram also expanded downward, indicating an increase in the bearish momentum. RSI (14) slipped lower to 55.3 from 57.7, indicating further weakening of the key index. Stochastic was slightly higher at 53.5 but is tapering off, indicating the weakening of the index's strength. Readings from the indicators showed that the FBM KLCI is again turning weak, and hence is likely to continue to consolidate.
The short term trend of the FBM KLCI remained in sideways range-bound, while the longer term uptrend is still intact. With the bearish down move yesterday, the FBM KLCI had closed below the short term 5 and 10-day SMA and formed a downside gap, issuing a short term bearish signal. Hence, the FBM KLCI is likely to continue to consolidate with a downward bias. Immediate downside critical support is at 1,765, and a break of this support will likely see the key index sliding lower to the 1,752-1,743 support zone.
Overnight, the Dow fell -126.79 points or -0.84% to close at 14,995.23. Today, the FBM KLCI is likely to trade within a range of 1,759 to 1,787.
This week's expected range: 1756 – 1791
Today’s expected range: 1759 – 1787
Resistance: 1779, 1783, 1787
Support: 1759, 1763, 1769
Stocks to watch: CEPAT, JCY, MALTON, NTPM, RSAWIT, TAGB, UNISEM