Stocks on Bursa Malaysia closed lower yesterday on lack of fresh leads and the recent disappointing second quarter corporate financial results. The benchmark FBMKLCI eased 2.82 points or 0.15% to 1,864.87 after moving between 1,853.48 and 1,872.45 throughout the day. Market breadth was negative with losers trouncing gainers by 455 to 386 while 324 counters were unchanged. Total volume rose to 2.99 billion shares worth RM2.104 billion from 2.802 billion shares worth RM2.157 billion on Tuesday.
The FBMKLCI opened 4.57 points higher at 1,872.26 and surged to hit the intra-day high of 1,872.45 right after opening. However, the rise could not sustain and the key index plunged on heavy profit-taking activity to hit the intra-day low of 1,853.48 thirty minutes after opening, losing 14.21 points at its worst. The key index rebounded from the low to gradually recover its lost ground to close 2.82 points lower at close. Chart-wise, the FBMKLCI formed a bearish black hammer-like candlestick which engulfed the body of the previous day’s candlestick, indicating heavy selling pressure. However, the long lower shadow also indicated buying support appearing at level below the 1,859-point support level. Hence, the FBMKLCI is likely to further consolidate today within a range of 1,853 to 1,880.
MACD and its histogram slid lower, indicating further loss in momentum. RSI (14) was lower at 47.2 from 49, indicating further loss in the index’s short term relative strength in the mildly bearish zone. Stochastic slipped lower to 54.8 from 71.7, indicating further weakening of the key index and continuation of the short term down cycle. Readings from the indicators showed that the FBMKLCI is losing strength and momentum, and hence, is likely to further consolidate.
The short and medium term trend of the FBMKLCI has turned sideways range-bound as the key index is now closing below the short and medium term moving averages but is supported below by the longer term moving averages. Hence, the FBMKLCI is likely to stay sideways range-bound within a range of 1,839 to 1,880 with a downward bias. Immediate downside support is at 1,859 and 1,853, while the overhead resistance zone is at 1,870 to 1880. On the broader market, rotational play on small caps and lower liners has slowed down as the number of losers continues to lead gainers, but a different set of stocks is in play as those which has risen substantially corrects and consolidate.
Overnight, the Dow rose 10.72 points or 0.06% to close at 17,078.28. Today, the FBM KLCI is likely to trade within a range of 1,835 to 1,891.
This week's expected range: 1837 – 1899
Today’s expected range: 1835 – 1891
Resistance: 1873, 1882, 1891
Support: 1835, 1844, 1854
Stocks to watch: AHB, AMPROP, BJASSET, CENTURY, DGB, FCW, GBH, GOODWAY, HHHCORP, MARCO, MAHSING, MIECO, MYEG, PMHLDG, PLABS, SCH
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