Stocks on Bursa Malaysia finished on an easier note yesterday in cautious trading as overall sentiment was cautious ahead of Bank Negara Malaysia's Monetary Policy Committee meeting today and that of the US Federal Open Market Committee meeting. The benchmark FBMKLCI fell 3.52 points or 0.19% to 1,843.78 after fluctuating between 1,841.05 and 1,845.74 throughout the day. Losers outpaced gainers by 520 to 299, with 316 counters unchanged. Total volume rose to 2.24 billion shares worth RM2.30 billion from 1.93 billion shares worth RM1.75 billion on Monday. Bursa Malaysia was closed for Malaysia Day holiday on Tuesday.
Despite a strong rebound on Wall Street overnight, the FBMKLCI opened 5.97 points lower at 1,841.33 and rebounded to hit the intra-day high of 1,845.74 at late morning. The key index fluctuated in a narrow range throughout the day, and hit an intra-day low of 1,841.05 before rebounding to close off low. Chart-wise, the FBMKLCI formed a bullish white candlestick which closed just above the mid-range of the day, indicating the bulls have a slight edge over the bears for the day. Hence, the FBMKLCI is likely to stay in consolidation today with a mild upward bias. Immediate overhead resistance zone is at 1,845 to 1,850, while the immediate downside support zone is at 1,841 to 1,836.
MACD and its histogram continued to slide lower and are below the zero-line, indicating an increased in the bearish momentum. RSI (14) was lower at 34.1 from 35.8, indicating the short term relative strength of the FBMKLCI is bearish. Stochastic continued to slide lower to 18 from 26.9, indicating very weak market strength and has entered the short term oversold zone. Readings from the indicators showed a bearish outlook of the FBMKLCI for the short term, and a technical rebound might be expected as the index is oversold for the short term.
The short term trend of the FBMKLCI remained down and bearish as the key index continued to stay below all the short term moving averages. The medium term trend is sideways with a bearish bias while the longer term trend is still up. With yesterday’s bearish downward move, the FBMKLCI has closed below the long term 200-day SMA and is considered mildly bearish for the long term, technically speaking. Nonetheless, the key index is still above the longer term 240, 300 and 360-day SMA, and only if the FBMKLCI closed below the 360-day SMA currently at 1813, the long term trend is considered bearish. On the broader market, trading of penny stocks still remained active and the volume continued to stay above the two billion shares mark.
Overnight, the Dow rose 24.88 points or 0.15% to close at 17,156.85. Today, the FBM KLCI is likely to trade within a range of 1,836 to 1,850.
This week's expected range: 1828 – 1896
Today’s expected range: 1836 – 1850
Resistance: 1846, 1848, 1850
Support: 1836, 1838, 1841
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