Stocks on Bursa Malaysia closed lower yesterday in tandem with regional bourses with the benchmark FBMKLCI finished 3.44 points or 0.19% easier at 1,846.05 points after moving between 1,843.85 points and 1,851.91 points throughout the day. Market breadth was negative with losers outpacing gainers by 444 to 384 while 316 counters remained unchanged. Total volume fell to 2.59 billion shares worth RM1.84 billion from 2.6 billion shares worth RM2.26 billion on last Friday.
Taking cue from the positive close on Wall Street last Friday, the FBMKLCI opened 2.16 points higher at 1,851.65 and surged to hit the intra-day high of 1,851.91 briefly after opening. However, the upward move found no follow through and the key index slipped lower on heavy profit-taking activity for the rest of the day to hit the intra-day low of 1,843.85 just before closing, but a last minute buying on selected blue-chips managed to lift the FBMKLCI to close off low. Chart-wise, the FBMKLCI formed a bearish dark-cloud-cover candlestick pattern which indicates profit-taking activity after two days of technical rebound on last Thursday and Friday. Hence, the FBMKLCI is likely to further consolidate today on follow through selling activity. Immediate downside support zone is at 1,843 to 1,836, while the overhead resistance zone is at 1,851 to 1,856.
MACD continued to slide lower below the zero-line, but its histogram contracted upward for a second bar, indicating a reduction in the bearish momentum. RSI (14) hooked downward to 37.5 from 39.5, indicating a mild pullback correction, and the key index is still in a bearish state. Stochastic was higher at 24.9 from 22.5, and has made a golden-cross over the slow stochastic line, issuing a stochastic buy signal and indicating the possible beginning of a short term up cycle. Readings from the indicators showed that the FBMKLCI is still in consolidation mode, and the bearish momentum is reducing.
The short and medium term trend of the FBMKLCI still remained down as the key index continues to stay below all the short and medium term moving averages. However, for the immediate near term, the FBMKLCI has turned sideways range-bound as the key index is now above the 5-day simple moving average (SMA) but is still below the 10-day SMA. Hence, the FBMKLCI is likely to stay in range-bound consolidation mode within a range of 1,836 to 1,856 until a breakout is seen on either side of the range. Nonetheless, the longer term trend of the FBMKLCI is still up. On the broader market, rotational play on small caps and penny stock is still alive as can be seen from the volume.
Overnight, the Dow fell 107.06 points or -0.62% to close at 17,172.68. Today, the FBM KLCI is likely to trade within a range of 1,834 to 1,860.
This week's expected range: 1818 – 1875
Today’s expected range: 1834 – 1860
Resistance: 1851, 1855, 1860
Support: 1834, 1839, 1842
Stocks to watch: ABLEGRP, BHS, BTM, CAREPLS, CWORKS, ESCERAM, GOCEAN, GREENYB, HIL, IFCAMSC, IRIS, MCLEAN, MIECO, MIKROMB, SCNWOLF, SMPC, SUCCESS, SUNWAY, VSOLAR
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