Stocks on Bursa Malaysia closed mixed on Monday on profit-taking as selling pressures continued after the recent gains, and ahead of the Nuzul al-Quran holiday on Tuesday. The FBMKLCI was 1.72 points or 0.09% higher at 1,884.87 after opening 0.62 of a point better at 1,883.77, and moved between 1,882.22 and 1,886.87 throughout the day. Market breadth was negative as losers led gainers by 454 to 372 with 341 counters unchanged. Total volume rose to 2.22 billion units valued at RM1.98 billion from last Friday's 2.04 billion units valued at RM2.45 billion.
Taking cue from the weak rebound of the Dow last Friday, the FBMKLCI opened 0.62 of a point higher at 1,883.77 and climbed to hit the intra-day high of 1,886.87 within the first hour after opening. However, the rise could not sustain and the key index fell on profit-taking activity to hit the intra-day low of 1,882.22 at late afternoon before a last minute buying on selected blue-chips which lifted the key index to close in the positive territory. Chart-wise, the FBMKLCI formed a white spinning-top candlestick which indicates consolidation with mild bullish bias. Hence, the FBMKLCI is likely to further consolidate and stay range-bound within a range of 1,880 to 1,890.
MACD continued to slide lower and its histogram extended southward, indicating an increase in the bearish momentum. RSI (14) hooked upward to 51.9 from 50.4, indicating a mild rebound, and the key index is in a neutral state. Stochastic was lower at 52.4 from 63, indicating continuation of the short term down cycle. Readings from the indicators showed that the FBMKLCI is in a state of consolidation, and is likely to extend the consolidation until reversal sign is observed.
The short term trend of the FBMKLCI is down as the key index is staying below the short term 5, 10, 15 and 20-day simple moving averages (SMA), but is holding above the critical short term 30-day SMA. Hence, the FBMKLCI is likely to stay range-bound with the 30-day SMA providing support at 1,880, while the 5-day SMA post the top resistance at 1,888, and a breakout of the key index at either side of the range will see the index continue to move in the direction of breakout. Nonetheless, the medium and long term uptrend is still intact, and hence, current short term weakness should be viewed as an opportunity to accumulate quality shares for longer term gain.
Overnight, the Dow rose 5.26 points or 0.03% to close at 17,060.68. Today, the FBM KLCI is likely to trade within a range of 1,877 to 1,891.
This week's expected range: 1865 – 1909
Today’s expected range: 1877 – 1891
Resistance: 1887, 1889, 1891
Support: 1877, 1880, 1882
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