Stocks on Bursa Malaysia ended lower last Friday with the benchmark FBMKLCI closing 10.47 points or 0.56% lower at 1,855.64, as investors took profit and were squaring positions for the weekend as renewed geopolitical fears may again pressure stocks this week. Week-on-week, the FBMKLCI dipped 12.82 points from 1,868.46 on previous Friday. Losers outpaced gainers by 435 to 389, with 341 counters unchanged. Total volume expanded to 2.49 billion shares worth RM2.23 billion from 2.04 billion shares worth RM1.92 billion on Thursday. Weekly turnover rose to 11.85 billion shares valued at RM10.11 billion, from 11.03.18 billion shares valued at RM8.65 billion on previous week.
The FBMKLCI was basically in sideways consolidation with a downward bias at latter part of last week. The key index opened last Monday 2.2 points lower at 1,866.26 but rebounded to close 2.63 points higher at 1,871.09 after moving in a tight range of 5.56 points. Tuesday saw the FBMKLCI opening 2.25 points lower at 1,868.84 after a weaker close on Wall Street overnight, but managed to rebound to hit the intra-week high of 1,876.21 before closing 3.03 points better at 1,874.12. Wednesday saw another listless trading day, as investors were awaiting clues on interest rate increases from the US Federal Reserve in the third week and the FBMKLCI closed 3.27 points lower at 1,870.85 after fluctuating in a narrow range of between 1,868.36 and 1,873.79. The FBMKLCI suffered heavy profit taking on Thursday and Friday to lose 4.74 points to 1,866.11 and another 10.47 points to close the week at the lowest level of 1,855.64.
On the weekly chart, the FBMKLCI formed a bearish black inverted hammer candlestick which indicates the bulls were initially in control but the bears took over at latter part of the week. Hence, the FBMKLCI is likely to continue its downward momentum to slide lower in the coming week. On the daily chart, the FBMKLCI formed a bearish long black candlestick which indicates heavy selling pressure on blue-chips last Friday, and the key index is likely to slide lower today on follow through selling. Immediate downside support is at 1,850, 1,846 and 1,837, while the overhead resistance zone is at 1,868 to 1,879.
Weekly MACD continued to slide lower, and its histogram also extended downward after contracting upward for four consecutive bars, indicating an end to the rebound and resumption of the bearish momentum. Daily MACD slid lower and made a dead-cross over the signal-line, issuing a bearish sell signal and indicating the FBMKLCI has again turned mildly bearish. Weekly RSI (14) hooked downward to 49 from 53.8, indicating the weekly relative strength of the FBMKLCI has again turned bearish. Daily RSI (14) slipped lower to 40.4 from 47.4, indicating the daily relative strength has turned bearish from a mildly bearish state. Weekly Stochastic hooked downward to 44.3 from 53 and has made a dead-cross over the weekly slow stochastic line, issuing a sell signal and resumption of the down cycle. Daily Stochastic slipped lower to 41.1 from 64.8, indicating heavy downward move and continuation of the daily down cycle. In short, readings from both the weekly and daily indicators showed that the FBMKLCI has again turned bearish and is likely to further correct downward.
With the bearish downward move of the FBMKLCI on last Friday, the short term trend of the FBMKLCI has turned down or bearish as the key index is now closing below all the short term simple moving averages (SMA). As for the medium term, the trend is still sideways range-bound as the medium term 60-day SMA is still flat with a bearish bias. Nonetheless, the long term trend of the FBMKLCI is still up. However, the FBMKLCI already closed below the 100, 120, and 150-day SMA, and is approaching the 200-day SMA which is currently at 1,849.89, and a break of the 200-day SMA support will likely trigger further selling pressure which will drag the key index lower towards the 240 and 300-day SMA support zone at 1, 840 to 1,826. From the angle of Elliott wave analysis, the FBMKLCI has completed the corrective B-wave, and the C-wave has just unfold with downside targets at 1,844, 1,835 and 1,821 being the 61.8%, 76.4% and 100% Fibonacci Projection of the C-wave. For the coming holiday-shorten week, Bursa Malaysia market is likely go into deeper correction or consolidation. However, rotational play on small caps and penny stocks is likely to continue but with reduced momentum as players are mostly away for the short school holiday break. Bursa Malaysia will be closed tomorrow, 16th September, for Malaysia Day Holiday.
Last Friday, the Dow fell 61.49 points or -0.36% % to close at 16,987.51. This week, the FBM KLCI is likely to trade within a range of 1,828 to 1,896, and today, the FBM KLCI is likely to trade within a range of 1,839 to 1,880.
This week's expected range: 1828 – 1896
Today’s expected range: 1839 – 1880
Resistance: 1863, 1872, 1880
Support: 1839, 1847, 1851
Stocks to watch: AAX, BTECH, DPS, FOCUS, GBGAQRS, GLBHD, GREENYB, IOIPG, KBES, MUH, NIHSIN, OKA, PASUKGB, PSIPTEK, SCICOM, SYCAL, YTLE
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