Stocks on Bursa Malaysia closed mixed yesterday while losses in blue-chips weighed on Bursa Malaysia at close despite rotational buying on small cap stocks. Blue-chips slipped into a near-term overbought correction as the local stock market succumbed to profit taking. The FBMKLCI edged down 0.49 of a point or 0.03% to 1,861.82 after opening 0.8 point higher at 1,863.11 and moved between 1,859.75 and 1,866.57 throughout the day. Gainers led losers by 435 to 382 while 320 counters were unchanged. Total volume rose to 3.29 billion units worth RM2.11 billion from 3.008 billion units worth RM1.97 billion on Monday.
Taking cue from the positive overnight close on Wall Street, the FBMKLCI opened 0.8 of a point higher at 1,863.11 and climbed higher to hit the intra-day high of 1,866.57 within the first thirty minutes after opening. However, the rise could not sustain and the key index fell on profit-taking activity to hit the intra-day low of 1,859.75 at late afternoon before rebounding slightly to close off low. Chart-wise, the FBMKLCI formed a black spinning-top candlestick which indicates uncertainty of market direction amid consolidation. Hence, the FBMKLCI is likely to further consolidate today with immediate downside support zone at 1,859 to 1,850, while the immediate overhead resistance zone is at 1,866 to 1,873.
MACD and its histogram continued to slide lower, indicating further loss in momentum. RSI (14) was marginally lower at 45.2 from 45.5, indicating a state of consolidation and the short term relative strength of the FBMKLCI is mildly bearish. Stochastic was lower at 66.7 from 77.1, indicating further weakening of the key index and a continuation of the short term down cycle. Readings from the indicators showed that the FBMKLCI is in a state of consolidation amid a mildly bearish outlook.
The short term trend of the FBMKLCI is down as the key index continues to stay below the short term moving averages. However, yesterday price action of the FBMKLCI showed that the key index is consolidating after a big fall on Monday, and the key index was fluctuating in a small range within Monday’s range. Hence, the FBMKLCI is likely to stay sideways range-bound within a range of 1,859 to 1,859 to 1,873 until a breakout is seen. Nonetheless, the long term uptrend still remained intact. Judging from the volume that is still in the region of three billion shares, rotational play on small caps and penny stocks is likely to continue.
Overnight, the Dow rose 29.83 points or 0.17% to close at 17,106.70. Today, the FBM KLCI is likely to trade within a range of 1,852 to 1,873.
This week's expected range: 1841 – 1898
Today’s expected range: 1852 – 1873
Resistance: 1865, 1869, 1873
Support: 1852, 1855, 1858
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