Stocks on Bursa Malaysia closed lower yesterday in lack luster trading, weighed by losses in finance counters. The FBM KLCI shed 8.42 points or 0.47% to end at 1,784.06 after hovering between 1,783.15 and 1,791.18 throughout the day. Losers led gainers by 420 to 359, with 276 counters unchanged. Turnover rose to 2.21 billion shares worth RM2.05 billion from 1.92 billion shares worth RM1.85 billion on Tuesday.
Taking cue from the fourth consecutive days of losses on Wall Street, the FBM KLCI opened 4.42 points lower at 1,788.06 and rebounded to the intra-day high of 1,791.18 at mid morning. The rebound could not sustained and the index slipped lower to the intra-day low of 1,783.15 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a bearish black inverted hammer-like candlestick which indicates sellers were dominant for the day, and hence, the FBM KLCI is likely to continue to consolidate today with an immediate downside support zone at 1,781 to 1,777, while the overhead resistance zone is at 1,791 to 1,793.
MACD has turned flat, and its histogram continued to contract downward, indicating a further loss in the index's momentum. RSI (14) slipped lower to 58.4 from 62.7, indicating a further weakening of the short term relative strength to a mildly bullish state from a bullish state. Stochastic was lower at 85.4 from 91.9, indicating the index is beginning to show sign of turning weak and continuation of a short term down cycle. Readings from the indicators showed that the FBM KLCI is losing its momentum and has gone into a consolidation mode.
The immediate short term trend of the FBM KLCI has shown the first sign of turning down as the key index has closed below the 5-day SMA for the first time since it crossed above it on August 30th. Nevertheless, the key index is still staying above the 10-day SMA which is currently at 1,782, giving the immediate support to the index, and a break below this 10-day SMA will likely see the FBM KLCI dipping deeper to the next support level at 1,768, provided by the 50 and 60-day SMA. The long term trend, nonetheless, still remained up. Judging from the volume and value traded, the second and third liners are still going to dominate the active scene while the benchmark index continues its consolidation.
Overnight, the Dow fell 61.33 points or -0.40% to close at 15,273.26. Today, the FBM KLCI is likely to trade within a range of 1,773 to 1,799.
This week's expected range: 1756 – 1828
Today’s expected range: 1773 – 1799
Resistance: 1789, 1794, 1799
Support: 1773, 1778, 1781
Stocks to watch: BENALEC, LBS, LBS-WA, MMODE, MUHIBAH, SCABLE, TAMBUN, ZELAN