Stocks on Bursa Malaysia gave up its earlier gains to close easier yesterday, with losses seen in selected key heavyweights and small capitalised stocks. The market moved in line with regional peers as Wall Street staged an overnight decline amid unrest in Hong Kong. At close, the benchmark FBMKLCI was 0.03 of a point lower at 1,846.31 after opening 1.78 points lower at 1,844.56. The key index hovered between 1,842.35 and 1,854.21 throughout the day. Market breadth was negative as losers led gainers by 455 to 355 with 333 counters unchanged. Total volume rose to 2.73 billion shares worth RM2.54 billion from 2.6 billion shares valued at RM1.88 billion yesterday.
Following the decline on Wall Street overnight, the FBMKLCI opened 1.78 points lower at 1,844.56 and rebounded to move higher in the morning session. The key index hit an intra-day high of 1,854.21 at mid-afternoon and followed by heavy profit-taking which erased all earlier gains to hit an intra-day low of 1,842.35 before rebounding on last minute buying to close almost unchanged. Chart-wise, the FBMKLCI formed a white shooting-star candlestick, a top reversal candlestick which indicates the bulls were initially in control but later took over by the bears. Hence, the FBMKLCI is likely to stay in consolidation today. Immediate overhead resistance zone is at 1,850 to 1,854, while the downside support zone is at 1,842 to 1,839.
MACD and its histogram continued to climb higher, albeit still below the signal-line, indicating further reduction of the bearish momentum. RSI (14) was flat at 41.9, indicating a state of consolidation and the short term relative strength of the key index remained mildly bearish. Stochastic was higher at 32.6 from 28.3, indicating a mild gain in strength and continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is in consolidation.
The general trend of the FBMKLCI is down. However, the immediate near term trend of the FBMKLCI has turned sideways range-bound as the key index is now closing above the 5 and 10-day simple moving average (SMA) but is still below other short and medium term SMA. Hence, the FBMKLCI is likely to sideways range-bound within a range of 1,829 to 1,856. On the longer term trend, the FBMKLCI has closed above the 240-day SMA but is still below the 200-day SMA, which is currently posting a strong resistance at 1,852-point level. Hence, a close of the FBMKLCI above the 200-day SMA may see the key index gradually turning bullish. On the broader market, speculative rotational play on small caps and penny stocks is still alive but with reduced momentum.
Overnight, the Dow fell 28.32 points or -0.17% to close at 17,042.90. Today, the FBM KLCI is likely to trade within a range of 1,829 to 1,866.
This week's expected range: 1806 – 1874
Today’s expected range: 1829 – 1866
Resistance: 1852, 1859, 1866
Support: 1829, 1835, 1841
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