Stocks on Bursa Malaysia ended easier yesterday in the absence of fresh market leads, in tandem with weak global sentiment. The FBM KLCI fell 2.68 points, or 0.15%, to close at 1,769.21. The key barometer opened 0.53 of a point higher at 1,772.42 and hovered between 1,769.21 and 1,776.07 throughout the day. Losers led gainers by 385 to 339 while 295 counters were unchanged. Total volume increased to 1.247 billion shares worth RM2.102 billion from 1.17 billion shares worth RM1.79 billion on Tuesday.
Taking cue from the positive close on Wall Street overnight, the FBM KLCI opened 0.53 points higher at 1,772.42 and climbed to the intra-day high of 1,776.07 within the first forty five minutes of trading. The key index then slipped lower gradually on profit-taking for the rest of the day to close at the lowest point of the day. Chart-wise, the FBM KLCI formed a bearish black inverted hammer candlestick which indicates the bulls were initially dominant but were later beaten by the bears. The formation of this candlestick served to confirm the top reversal dark-cloud-cover candlestick pattern formed a day earlier. Hence, the FBM KLCI is likely to continue its downward momentum to slide lower today. Immediate downside support zone is at 1,767 to 1,754, while the overhead resistance zone is at 1,777 to 1,782.
MACD continued to climb higher and so is the histogram, indicating a further improvement in the upward momentum. RSI (14) was lower at 53.2 from 54.3, indicating a further loss in the short term relative strength, and the key index is now in a mildly bullish state. Stochastic was higher at 82.4 from 80.4, and is tapering off, indicating the short term upward momentum is weakening but the short term up cycle is still intact. Readings from the indicators showed that the momentum of the FBM KLCI is weakening and may head for a consolidation.
The overall trend of the FBM KLCI remained up. However, for the short term, the FBM KLCI may move sideways range-bound as it continued to stay within the range of 1,723 to 1,795. A breakout of the key index on either side of this range will see it continue to move in that direction. Immediate downside support is pegged at the psychological support level of 1,750. As the total volume continued to stay on the low side, the market is likely to move into consolidation mode.
Overnight, the Dow rose 56.14 points or +0.38% to close at 14,988.55. Today, the FBM KLCI is likely to trade within a range of 1,760 to 1,782.
This week's expected range: 1707 – 1807
Today’s expected range: 1760 – 1782
Resistance: 1773, 1778, 1782
Support: 1766, 1764, 1766
Stocks to watch: A&M, JAKS, KPS, LBALUM, LBS, MHB, PUNCAK, STONE