Stocks on Bursa Malaysia ended the yesterday lower on profit taking activities, after the local benchmark index broke the all-time high twice in the last two days. Asian stock markets fell for the third day after investors remained cautious ahead of the corporate earnings season and after record highs on Wall Street. At close, the benchmark FBMKLCI ended 1.49 points or 0.08% lower at 1,891.16, after moving between 1,887.96 and 1,892.17 throughout the trading day. Market breadth was negative as decliners outpaced advancers by 498 to 341, with 308 counters unchanged. Total volume declined to 1.78 billion units, worth RM1.99 billion, from Tuesday's 1.79 billion shares worth RM2.29 billion.
Taking cue from the three digit losses of the Dow overnight, the FBMKLCI opened 4.22 points lower with a downside gap at 1,888.43 and rebounded to the intra-day high of 1,891.17 within the first thirty minutes. However, the rebound saw no follow through and the key index fell on profit-taking to the intra-day low of 1,887.96 at midmorning and rebounded to move sideways with an upward bias to close off low. Chart-wise, the FBMKLCI formed a bullish white candlestick which indicates buyers were strong then sellers or accumulation, and hence, the FBMKLCI is likely to stage further rebound today. Immediate overhead resistance zone is at 1,892 to 1,896, while the immediate downside support zone is at 1,887 to 1,885.
MACD was almost flat, while its histogram contracted slightly, indicating a loss in momentum or in a state of consolidation. RSI (14) hooked downward to 58.8 from 60.3, indicating loss in the index’s relative strength from bullish to mildly bullish. Stochastic was however higher at 83.5 from 80.7, indicating a continuation of the short term up cycle. Mixed signals from the indicators showed that the FBMKLCI is in a state of consolidation with bullish bias as indicated by the stochastic.
Despite the pullback correction yesterday, the trend of the FBMKLCI still remained up and bullish as the key index continues to stay above all the moving averages after falling below the 5-day SMA on intra-day basis. Hence, the FBMKLCI is likely to continue its uptrend to move higher to test the top resistance of 1,896.23 follow by the psychological level of 1,900-point soon.
Overnight, the Dow rose 78.99 points or 0.47% to close at 16,985.61. Today, the FBM KLCI is likely to trade within a range of 1,884 to 1,896.
This week's expected range: 1862 – 1906
Today’s expected range: 1884 – 1896
Resistance: 1892, 1894, 1896
Support: 1884, 1886, 1888
Stocks to watch: ALCOM, BERTAM, DOLMITE, HOVID, IPMUDA, JMR, JOHOTIN, MIKROMB, NOVAMSC, NYLEX, SCOMIES, TEBRAU, SONA, UNISEM
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