Stocks on Bursa Malaysia closed broadly higher yesterday, but gains were limited by losses in selected heavyweights and blue-chips. The FBMKLCI ended 2.6 points or 0.14% lower at 1,867.32 after moving between 1,864.72 and 1,871.26 throughout the day. Gainers led losers by 459 to 388, with 330 counters unchanged. Total volume surged to 3.19 billion units valued at RM2.327 billion from 2.77 billion units valued at RM2.099 billion on Wednesday.
Taking cue from the mild rebound on Wall Street overnight, the FBMKLCI opened 0.12 of a point higher at 1,870.04 and moved higher to hit the intra-day high of 1,871.26 within the first thirty minutes after opening. However, the rise could not sustain and the key index fell on profit-taking activity for the rest of the day to hit the intra-day low of 1,864.72 before rebounding slightly to close off low. Chart-wise, the FBMKLCI formed a bearish black spinning-top candlestick which indicates continuation of selling pressure from the previous day’s losses. Nonetheless, the black spinning-top with a slightly longer lower shadow also indicated buying support amid consolidation. Hence, the FBMKLCI is likely to further consolidate today with immediate downside support zone at 1,863 to 1,860, while the overhead resistance zone is at 1,871 to 1,880.
MACD and its histogram continued to slide southward, indicating an increased in the bearish momentum. RSI (14) was lower at 42.2 from 44, indicating further loss in the short term relative strength in the mildly bearish zone. Stochastic hooked downward to 31.2 from 37.5 and has made a dead-cross over the slow stochastic line, issuing a stochastic sell signal. Readings from the indicators showed that the FBMKLCI is turning weak and is likely to further consolidate.
The technical picture of the FBMKLCI remained unchanged in which the short and medium term trend is down, and the key index is currently in sideways range-bound consolidation. Nonetheless, the longer term uptrend is still intact. As the trading week is coming to an end today, more profit-taking activity is expected today ahead of the weekend, However, rotational play on small cap and penny stocks is likely to continue as can be seen from the surged in volume to above three billion shares traded yesterday.
Overnight, the Dow fell 75.07 points or -0.46% to close at 16,368.27. Today, the FBM KLCI is likely to trade within a range of 1,857 to 1,877.
This week's expected range: 1829 – 1911
Today’s expected range: 1857 – 1877
Resistance: 1870, 1874, 1877
Support: 1857, 1861, 1864
Stocks to watch: ALCOM, CCM, DUFU, ECOFIRS, EWEIN, FRONTKN, GREENYB, GUH, HANDAL, JADI, KELADI, MPAY, MCLEAN, MIECO, NIHSIN, PESONA, PFCE, PW, SCNWOLF, VS
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.