Stocks on Bursa Malaysia ended lower yesterday on selling pressure in line with regional bourses despite the Dow closing at new record high. The FBMKLCI was 3.57 points or 0.19% lower at 1,883.14, after opening 0.16 of a point higher at 1,888.15, and moved between 1,879.4 and 1,888.15 throughout the day. Gainers led losers by 416 to 411 with 347 counters unchanged. Total volume fell to 2.12 billion units valued at RM2.21 billion from Wednesday’s 2.40 billion units valued at RM2.63 billion.
Taking cue from the overnight record closing of the Dow, the FBMKLCI opened 1.44 points higher at 1,888.15, the intra-day high, and slipped lower on continued profit-taking activity throughout the day to hit the intra-day low of 1,89.40 just before closing. The key index rebounded on last minute buying of selected blue-chips to close off low. Chart-wise, the FBMKLCI formed a bearish black hammer-like candlestick which indicates the bears or sellers were dominant for the day in pushing the key index lower. Hence, the FBMKLCI is likely to continue its correction process to further consolidate today, and as the week is coming to a close, more profit-taking activity ahead of the weekend is likely to drag the key index lower.
MACD and its histogram continued to slide lower, indicating further increased in the bearish momentum. RSI (14) hooked down to 50 from 53.5, indicating a loss of the key index’s relative strength to a neutral state from a mildly bullish state. Stochastic was flat at 42.3, indicating a pause in the short term down cycle. Readings from the indicators showed that the FBMKLCI is turning weak as it continues to lose momentum, and hence, is likely to further consolidate.
The short term trend of the FBMKLCI has turned down as the key index has now closed below the short term 5, 10 and 20-day simple moving average (SMA). Moreover, the 5-day SMA has also crossed below the 10 and 20-day SMA, confirming the short term downtrend. Hence, the FBMKLCI is likely to slip lower to look for support from the medium term moving averages at 1,881 to 1,875. Nevertheless, the medium to long term uptrend of the FBMKLCI is still intact. On the broader market, judging from the bullish volume of above 2 billion shares, rotational play on small cap and penny stock is likely to continue. However, news on Malaysia Airlines MH17 being shot down in Ukraine may dampen market sentiment.
Overnight, the Dow fell 161.39 points or -0.94% to close at 16,976.81. Today, the FBM KLCI is likely to trade within a range of 1,870 to 1,896.
This week's expected range: 1865 – 1909
Today’s expected range: 1870 – 1896
Resistance: 1887, 1892, 1896
Support: 1870, 1874, 1878
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