Stocks on Bursa Malaysia finished yesterday in the red despite the regional bourses' bullish performances after positive data for China's factory activity. The benchmark FBMKLCI declined by 5.86 points or 0.32% to end at 1,840.19 points after moving between 1,832.54 points and 1,842.15 points throughout the day. Market breadth was negative with losers outpacing gainers by 527 to 284 while 330 counters were unchanged. Total volume fell to 2.35 billion shares worth RM2.23 billion from 2.59 billion shares worth RM1.84 billion on Monday.
Taking cue from the weak overnight performance of Wall Street, the FBMKLCI opened lower with a downside gap of 6.95 points at 1,839.10 and plunged to hit the intra-day low of 1,832.54 within the first thirty minutes after opening. The key index rebounded from the low to touch the intra-day high of 1,842.15 before pulling back to close off high. Chart-wise, the FBMKLCI formed a white hammer candlestick, a bullish bottom reversal candlestick pattern which indicates the bears were initially strong in driving the key index to a new low, but later the bulls appeared to lift the index off low. Hence, the FBMKLCI is likely to stay in consolidation until a confirmation of reversal is seen. Immediate overhead resistance zone is at 1,842 to 1,846, the overhead gap area, while the immediate downside support zone is at 1,836 to 1,832.
MACD continued to slide lower below the zero-line, and its histogram also extended downward, indicating an increased in the bearish momentum. RSI (14) slipped lower to 34.2 from 37.5, indicating a pickup in the bearish momentum. Stochastic hooked downward to 23.9 from 24.9, and has crossed below the slow stochastic line, indicating a resumption of the bearish down cycle. Readings from the indicators showed that the FBMKLCI has again turned bearish and is likely to slide lower or further consolidate in the short term.
With the bearish downward move yesterday, the trend of the FBMKLCI has turned bearish as the key index is now closing below the 200 and 240-day long term simple moving average (SMA), and also the key index has registered a new low of 1,832.54 yesterday confirming the downtrend. Hence, the FBMKLCI is likely to continue its downtrend to test the lower long term support by the 300-day SMA which is currently at 1,827, follow by the 360-day SMA at 1,815. On the broader market, however, rotational play on the small caps and penny stocks were still active with volume continue to stay above the two billion shares mark but the momentum is reducing.
Overnight, the Dow fell 116.81 points or -0.68% to close at 17,055.87. Today, the FBM KLCI is likely to trade within a range of 1,824 to 1,851.
This week's expected range: 1818 – 1875
Today’s expected range: 1824 – 1851
Resistance: 1844, 1847, 1851
Support: 1824, 1828, 1834
Stocks to watch: AWC, BPURI, CWORKS, DUFU, HOMERIZ, KSSC, LEONFB, MMSV, NIHSIN, PENTA, SONA, TAFI, VS, YHNPROP
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