Stocks on Bursa Malaysia closed mixed yesterday in active trading on mild profit-taking in high volume stocks, as players were locking in profit due to a lack of strong catalyst in the near term. The FBMKLCI closed 2.52 points or 0.14% higher at 1,792.39 after hovering between 1,789.39 and 1,795.14 during the entire trading session. Losers led gainers by 438 to 350, with 324 counters unchanged. Total turnover rose to 1.51 billion shares worth RM1.88 billion from 1.49 billion shares valued at RM1.58 billion on Friday.
Taking cue from the strong performance on Wall Street last Friday, the FBMKLCI opened 1.52 points higher at 1,791.39 but slipped to the intra-day low of 1,789.39 within the first ten minutes after opening. The key index rebounded and climbed gradually to the intra-day high of 1,795.14 at noon, It moved sideways range-bound for most part of the day. Chart-wise, the FBMKLCI formed a white spinning-top candlestick which indicates indecision of market direction. Hence, the FBMKLCI may pause for a breather or consolidate within its current sideways range of 1,780 to 1,795.
MACD continued to slide lower, but its histogram contracted upward for the second bar, indicating a reduction in the bearish momentum and a state of consolidation. RSI(14) was higher at 47.4 from 45.3, indicating a mild improvement in the short term relative strength to the positive side but the key index is still in the mildly bearish zone. Stochastic was higher at 20.1 from 11.2, and has crossed over the slow stochastic line, issuing a short term buy signal and indicated the possible beginning of the short term up cycle. Readings from the indicators showed that the FBMKLCI is currently in a state of consolidation.
The immediate short term trend of the FBMKLCI has shown the first sign of reversal as the key index has closed above the 5-day SMA after staying below it for more than ten sessions. However, it is still closing below the 10, 15, 20 and 3-day SMA. The FBMKLCI is likely to move sideways range-bound for the short term as it is now facing top resistance from the short term moving averages but has support below by the medium and longer term moving averages. The consolidation is likely to prolong as the year end school holiday has started, and also the market is lack of strong catalyst at the moment. Nevertheless, rotational play on the second and third liners is likely to continue.
Overnight, the Dow rose 14.32 points or +0.09% to close at another fresh high of 15,976.02. Today, the FBM KLCI is likely to trade within a range of 1,783 to 1,800
This week's expected range: 1752 – 1831
Today’s expected range: 1783 – 1800
Resistance: 1795, 1798, 1800
Support: 1783, 1786, 1789
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