Stocks on Bursa Malaysia closed lower yesterday on follow-through selling in small cap stocks amid weaker regional stock market performance. However, the FBMKLCI ended flat after reacting negatively to news that the US Federal Reserve could start to raise interest rates six months later. At close, the benchmark FBMKLCI finished at 1,818.17, up 0.73 point or 0.04%, after hovering between 1,811.16 and 1,818.17. Losers outpaced gainers by 440 to 321, with 350 counters unchanged. Turnover stood at 1.51 billion shares worth RM1.85 billion from Wednesday’s 1.55 billion shares worth RM1.76 billion.
Taking cue from the negative performance of Wall Street overnight, the FBMKLCI opened 3.15 points lower at 1,814.29 and slipped lower to the intra-day low of 1,811.16 within the first forty minutes after opening, losing 6.28 points at its worst. The key index rebounded from the intra-day low and moved sideways for a major part of the day, and some late buying interest on selected blue-chip stocks managed to lift the index to close marginally higher. Chart-wise, the FBMKLCI formed a bullish white piercing-line candlestick pattern, a bullish reversal pattern which indicates the fight back of the bulls or buyers after being beaten initially. Hence, the FBMKLCI is likely to stage further rebound today if the buying interest continues. Immediate overhead resistance zone is at 1,821 to 1,828, while the downside support zone is at 1,811 to 1,803.
MACD continued to slide lower below the zero-line. However, its histogram further contracted upward, indicating a state of consolidation. RSI (14) hooked upward gently to 48.1 from 47.7, indicating a mild rebound, and the key index is still in a mildly bearish state. Stochastic was higher at 44.4 from 41.6, indicating a mild improvement in the market strength and continuation of the short term up cycle. Mixed signals from the indicators showed that the FBMKLCI is currently in a state of consolidation.
The technical picture of the FBMKLCI remained unchanged with the short and medium term trend in sideways range-bound as the key index continued to get trapped within the short and medium term moving averages within a range of 1,802 to 1,838. Nonetheless, the long term trend still remained up. Judging from the lukewarm total volume, rotational play on the small-cap is likely to continue while the big-cap continues with their consolidation.
Overnight, the Dow rose 108.88 points or 0.67% to close at 16,331.05. Today, the FBM KLCI is likely to trade within a range of 1,806 to 1,825.
This week's expected range: 1773 – 1852
Today’s expected range: 1806 – 1825
Resistance: 1820, 1823, 1825
Support: 1806, 1808, 1813
Stocks to watch: ACOSTEC, CNOUHUA, CWORKS, CYPARK, FITTERS, HALEX, LBICAP, MEGB, NYLEX, POHUAT, TAMBUN, TECFAST, TITIJYA
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