Stocks on Bursa Malaysia closed lower yesterday, dragged down by selling in blue-chips and key heavyweights, led by TNB, Genting and Public Bank. The benchmark FBMKLCI finished at 1,865.2, down 7.35 points or 0.39% after fluctuating between 1,862.84 and 1,869.6 throughout the day. Losers led gainers by 407 to 333, with 336 counters unchanged. Volume shed to 1.02 billion shares worth RM1.43 billion from 1.19 billion shares worth RM1.97 billion transacted on Tuesday.
Taking cue from the mild losses of the Dow overnight, the FBMKLCI opened 3.92 points lower at 1,868.63 and rebounded to the intra-day high of 1,869.60 within five minutes after opening. However, the rebound could not sustain and the key index slipped lower for the rest of the day on continued selling pressure. The key index hit the intra-day low of 1,862.84 before rebounding to close off low. Chart-wise, the FBMKLCI formed a small black hammer-like candlestick which indicates consolidation amid profit-taking. Hence, the FBMKLCI is likely to further consolidate today. Immediate downside zone is at 1,862 to 1,860, while the overhead resistance zone is at 1,869 to 1,872.
MACD continued to slide lower, and its histogram also extended southward, indicating an increased in the bearish momentum. RSI (14) hooked downward to 47.9 from 53.4, indicating the key index has again turned mildly bearish for the short term. Stochastic was lower at 20.9 from 29.9, indicating continuation of the short term down cycle and further weakness is expected ahead. Readings from the indicators showed that the FBMKLCI is weak and bearish for the short term, and further consolidation is expected ahead.
With the pullback in the key index yesterday, the short term trend of FBMKLCI has remained sideways as the index is now trapped within a cluster of short to medium term moving averages. The FBMKLCI is closing below the short term moving averages but is support below by the medium term moving averages, i.e. the 50-day SMA, which is currently at 1,862, and a break of this all-important immediate support will see the FBMKLCI correcting deeper to the 1,855-point level, the support provided by the 60-day SMA. The broader market is likely to see more consolidation as the total volume continue to dwindle to a new low of about one billion shares yesterday.
Overnight, the Dow rose 15.19 points or 0.09% to close at 16,737.53. Today, the FBM KLCI is likely to trade within a range of 1,862 to 1,878.
This week's expected range: 1844 – 1899
Today’s expected range: 1862 – 1878
Resistance: 1874, 1876 1878
Support: 1862, 1864, 1868
Stocks to watch: AMPROP, D&O, DAIMAN, ECOWLD, ELSOFT, OPENSYS, OVERSEA, SALCON, SCGM, SUNWAY, UNISEM, WZSATU
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