Stocks on Bursa Malaysia closed lower yesterday following the weaker performance on regional markets as the foreign fund exodus continued. Asian stocks were less impressive as funds continued to flow into European markets, anticipating a sustained recovery in the Eurozone going forward. The FBMKLCI slipped 2.24 points or 0.12% to close at 1,825.24, after moving between 1,822.68 and 1,828.23 throughout the day. Market breadth was negative as losers outnumbered gainers by 454 to 393, while 307 counters were unchanged. Volume fell to 2.86 billion shares worth RM2.3 billion from 3.63 billion shares worth RM2.57 billon on Monday.
The FBMKLCI opened 0.28 of a point higher at 1,827.76 and surged to hit the intra-day high of 1,828.23 within the first five minutes after opening, and the key index slipped lower for the rest of the day on persistent selling pressure. It hit an intra-day low of 1,822.68 before rebounding slightly to close off low. Chart-wise, the FBMKLCI formed a dark-cloud-cover candlestick pattern which indicates mild profit-taking activity. Hence, the FBMKLCI is likely to stay in consolidation if the profit-taking activity continues. Immediate overhead resistance zone is at 1,833 to 1,838, while the immediate downside support zone is at 1,822 to 1,813.
MACD was higher and has crossed above the zero-line, indicating the key index is turning bullish. However, its histogram contracted slightly, indicating a state of consolidation. RSI (14) hooked downward to 55 from 56.2, reflecting a mild pullback correction, and the short term relative strength of the FBMKLCI is still mildly bullish. Stochastic hooked upward to 87.4 from 85.2, indicating the index is still strong for the short term. Mixed readings from the indicators showed that the FBMKLCI is moving into a consolidation state.
The short term trend of the FBMKLCI is turning into sideways as the index has been congesting within a range of 1,813 to 1,833 over the last few sessions. The medium term trend is also sideways as the key index is fluctuating around the mid-range of the 1,882.2 to 1,769.8 retracement range. Nonetheless, the long term trend still remained up. As the FBMKLCI goes into a consolidation mode, the general market is still likely to remain active with focus on small-caps and lower liners, judging from the high trading volume of more than 2 billion shares over the last few sessions.
Overnight, the Dow fell 23.99 points or 0.15% to close at 16,130.40. Today, the FBM KLCI is likely to trade within a range of 1,816 to 1,833.
This week's expected range: 1795 – 1845
Today’s expected range: 1816 – 1833
Resistance: 1828, 1830, 1833
Support: 1816, 1819, 1822
Stocks to watch: A&M, EDUSPEC, GHLSYS, HEVEA, HOKHENG, LBALUM, MALTON, THHEAVY, TITIJYA, TROP
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.