Stocks on Bursa Malaysia endured another listless trading yesterday, as investors were awaiting clues on interest rate increases from the US Federal Reserve at its Federal Open Market Committee meeting in the third week of this month and Bank Negara Malaysia's Monetary Policy Committee meeting during the same time on another possible rate rise. The benchmark FBMKLCI closed 3.27 points or 0.17% lower at 1,870.85 after fluctuating between 1,868.36 and 1,873.79. Losers outpaced gainers by 424 to 399, with 325 counters unchanged. Total volume fell to 2.18 billion shares worth RM2.01 billion from 2.45 billion shares worth RM2.02 billion on Tuesday.
Taking cue from the near hundred point drop of the Dow overnight, the FBMLCI opened 3.58 points lower at 1,870.54. The key index rebounded to hit the intra-day high of 1,873.79 in the next forty minutes but succumbed to continued profit-taking pressure which sent the index to the intra-day low of 1,868.36, losing 5.76 points at its worst. However, some bargain hunting activity in the afternoon managed to lift the index to close off low. Chart-wise, the FBMKLCI formed a white spinning-top candlestick in Harami position, indicating indecision of market direction and a state of consolidation. Hence, the FBMKLCI is likely to stay in range-bound consolidation today within a range of 1,868 to 1,876.
MACD was marginally higher, but its histogram contract downward, indicating a loss in the upward momentum and consolidation. RSI (14) hooked downward to 51.2 from 53.9, indicating a mild pullback correction. Stochastic was higher at 71.2 from 68.1, indicating a continuation of the short term up cycle. Mixed readings from the indicators showed that the FBMKLCI is in a state of consolidation.
With the pullback correction yesterday, the short term trend of the FBMKLCI continued to stay sideways range-bound within the short term range of 1,860 to 1,879. The medium term trend of the FBMKLCI is also sideways range-bound within a bigger range of 1,837 to 1,896. Nevertheless, the long term trend of the FBMKLCI is still up. On the broader market, rotational play on small caps and penny stocks is still alive. However, the momentum has greatly reduced as can be seen from the total volume which is near the lower end of the 2 billion shares range as traders closed position ahead of the coming one week school holiday break.
Overnight, the Dow rose 54.84 points or 0.32% to close at 17,068.71. Today, the FBM KLCI is likely to trade within a range of 1,862 to 1,879.
This week's expected range: 1838 – 1891
Today’s expected range: 1862 – 1879
Resistance: 1873, 1876, 1879
Support: 1862, 1865, 1868
Stocks to watch: BIG, CAREPLS, CWORKS, GOB, HHGROUP, IRIS, KOSSAN, NIHSIN, OLYMPIA, PASUKGB, SASBADI, SIGN, TEKSENG, TOPGLOV
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