Stocks on Bursa Malaysia closed broadly lower yesterday as investors had reacted negatively to the rising tensions in Ukraine, sending most global equity markets including Bursa Malaysia on a downtrend yesterday. The FBMKLCI fell 10.97 points or 0.6% to close at 1,824.69 after hovering between 1,813.6 and 1,835.27 throughout the day. Losers outnumbered gainers by 672 to 222 with 242 counters unchanged. Volume fell to 2.1 billion shares worth RM2.05 billion from 2.45 billion shares worth RM2.68 billion on Friday.
The FBMKLCI opened 1.22 points lower at 1,834.44 and rebounded to the intra-day high of 1,835.27 right after opening. However, the key index plunged to the intra-day low of 1,813.60 in the next twenty minutes succumbing to heavy selling pressure, losing 22.06 points at its worst, before rebounding to move sideways for the rest of the day. Chart-wise, the FBMKLCI formed a bearish black hammer-like candlestick with a long lower shadow which closed just above the mid-range of the day. The candlestick formation indicated that there was good buying support for index-linked counters when the index fell to the immediate support of 1,813, and the FBMKLCI is likely to continue to consolidate today. Immediate downside support zone is at 1,820 to 1,813, while the overhead resistance zone is at 1,830 to 1,835.
MACD hooked downward slightly, and its histogram also contracted, indicating a reduction in the index’s momentum after a one day upswing. RSI (14) fell to 51.4 from 58, indicating a strong pulled back of the key index to the neutral state from the mildly bullish state. Stochastic was lower at 78.7 from 82.6, indicating the key index is losing its strength and a continuation of the short term down cycle. Readings from the indicators showed that the FBMKLCI is losing its momentum, and is poised for further correction or consolidation.
The technical picture of the FBMKLCI is still very much unchanged with the short and medium term trend remained in sideways range-bound. However, with the heavy selling yesterday, it might have triggered short term downward pressure which will see the key index continue to slide lower on external factors. Nonetheless, the long term trend still remained up, and the current weakness should be viewed as an opportunity to buy on dip on quality stocks for longer term gain.
Overnight, the Dow fell 153.68 points or -0.94% to close at 16,168.03. Today, the FBM KLCI is likely to trade within a range of 1,792 to 1,856.
This week's expected range: 1813 – 1850
Today’s expected range: 1792 – 1856
Resistance: 1835, 1846, 1856
Support: 1792, 1802, 1813
Stocks to watch: ENCORP, EXTOL, KFM, PERDANA, TIMECOM, YNHPROP
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