Stocks on Bursa Malaysia ended lower yesterday on lack of buying support for local equities amid cautious global sentiment. The benchmark FBMKLCI shed 10.2 points or 0.56% to close at 1,822.06, after moving between 1,817.2 and 1,827.29 points throughout the day. Market breadth was negative with losers outpacing gainers by 519 to 278, with 284 counters unchanged. Volume rose to 1.69 billion shares worth RM1.86 billion from last Friday’s 1.57 billion shares worth RM1.81 billion.
The FBMKLCI opened lower with a downside gap of 5.88 points at 1,826.38 and slipped lower to hit the intra-day low of 1,817.20 within the first fifteen minutes after opening, losing 15.06 points at its worst. The key index rebounded from the low and moved gradually higher to recoup some of its earlier losses to close at the mid-range of the day. Chart-wise, the FBMKLCI formed a bearish black hammer-like candlestick which indicates the supply and demand was in near equilibrium as selling on fear only took place at the very initial stage, but buyers was able to absorb the selling. Hence, the FBMKLCI is likely to stay in consolidation today if cautious sentiment remains. Immediate downside support zone is at 1,817 to 1,813, while the immediate overhead resistance zone is at 1,827 to 1,831.
MACD slid lower and has made a dead-cross over the signal-line, issuing a sell signal, and indicated that the FBMKLCI is losing its momentum and likely to go into a deeper correction. RSI (14) was lower at 48.7 from 54.5, indicating the FBMKLCI has turned mildly bearish for the short term. Stochastic hooked downward strongly to 69.4 from 81.5, and has made a dead-cross over the slow stochastic line, issuing a sell signal. Readings from the indicators showed that the FBMKLCI is turning weak for the short term as bearish signals were observed on all three momentum indicators, and hence, the FBMKLCI is likely to extend its correction and consolidation.
The FBMKLCI made a downside breakaway gap yesterday and is closing below the short term 5, 10, 15 and 20-day simple moving averages (SMA). It also closed below the medium term 50 and 60-day SMA, marking the possible beginning of a bearish down leg. Immediate downside support level is at 1,816-point level provided by the 30 and 100-day SMA which meet at the same level, further downside support level is at 1,810-point provided by the 120-day SMA. The short term outlook has turned bearish, but nevertheless, the long term trend still remained up at the moment.
Overnight, the Dow fell 34.04 points or -0.21% to close at 16,418.68. Today, the FBM KLCI is likely to trade within a range of 1,806 to 1,837.
This week's expected range: 1792 – 1863
Today’s expected range: 1806 – 1837
Resistance: 1827, 1832, 1837
Support: 1806, 1812, 1817
Stocks to watch: BORNOIL, GHLSYS, KESM, LONBISC, MHC, OKA, PELIKAN, SMRT, THPLANT, YLI
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