Stocks on Bursa Malaysia closed mixed yesterday with the benchmark FBMKLCI ended 0.11 point or 0.01% easier on last-minute selling as investors took some profits off the table. At close, the key index stood at 1,840.08, after moving between 1,838.67 and 1,844.77 throughout the day. Market breadth, however, was positive with gainers edging losers by 427 to 371 while 336 counters were unchanged. Total volume increased to 2.68 billion shares worth RM2.19 billion from 2.35 billion shares worth RM2.23 billion recorded on Tuesday.
The FBMKLCI opened 0.53 points higher at 1,840.72 but slipped lower on profit-taking to hit the intra-day low of 1,838.67 in the first thirty five minutes after opening. The key index rebounded from the low and climbed higher gradually to hit the intra-day high of 1,844.77 just before the market close. However, a last minute sell down of selected blue-chips pulled the key index to close marginally lower in the negative territory. Chart-wise, the FBMKLCI formed a black inverted hammer candlestick which indicates the bulls were initially in control but the bears later took over to neutralize the bulls’ effort. Hence, the FBMKLCI is likely to stay in consolidation today. Immediate overhead resistance zone is at 1,844 to 1,851, while the downside support zone is at 1,838 to 1,832.
MACD continued to slide lower, but its histogram contracted upward slightly, indicating a state of consolidation. RSI (14) was marginally lower at 34.1 from 34.2, indicating consolidation and the key index is still in a bearish state. Stochastic was lower at 19.5 from 23.9, indicating weakness and the index is again entering the oversold zone. Readings from the indicators showed that the FBMKLCI is in a state of consolidation and is oversold on the stochastic, and hence, a rebound might be expected ahead.
The trend of the FBMKLCI is down and bearish as the key index continues to stay below the short, medium and long term moving averages. Technically, the FBMKLCI has entered a bear phase as the index is closing below the 200 and 240-day simple moving averages (SMA). Nonetheless, the price action of the key index over the last few sessions showed that the index is finding support above the 1,840-point level as each time the index pierced below the 1,840-point level, buying supports came in to lift the index up. Hence, the FBMKLCI is likely to stay in range-bound consolidation within a range of 1,832 to 1,850. On the broader market, rotational play on small caps and penny stocks still remained active which keep the market alive.
Overnight, the Dow rose 154.19 points or 0.90% to close at 17,210.06. Today, the FBM KLCI is likely to trade within a range of 1,831 to 1,850.
This week's expected range: 1818 – 1875
Today’s expected range: 1831 – 1850
Resistance: 1843, 1847, 1850
Support: 1831, 1835, 1837
Stocks to watch: ASB, BORNOIL, CAB, CAREPLS, DPS, DRBHCOM, EITA, HIAPTEK, IREKA, JIANKUN, KUCHAI, MYEG, OCNCASH, SUCCESS, SUMATEC, SYCAL, TAFI, VSOLAR, YILAI, ZELAN
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