Stocks on Bursa Malaysia ended lower yesterday on profit-taking following the weak regional sentiment after losses on Wall Street overnight. At close, the benchmark FBMKLCI declined 0.99 point or 0.05% to 1,845.32, after opening 0.69 of a point higher at 1,847.00 and moved between 1,842.60 and 1,847.70 throughout the day. Decliners outpaced gainers by 562 to 277, while 287 counters were unchanged. Total volume fell to 2.23 billion shares valued at RM1.64 billion from 2.73 billion shares worth RM2.54 billion on Tuesday.
Following a mild decline on Wall Street overnight, the FBMKLCI opened 0.69 of a point higher at 1,847.00 and fluctuated within a narrow range to hit the intra-day high of 1,847.70 within the first forty minutes after opening. The rise could not sustain and the key index fell on profit-taking activity for the rest of the day to hit the intra-day low of 1,842.60 just before closing, and some last minute bargain hunting lifted the key index to close off low. Chart-wise, the FBMKLCI formed a bearish black hangman candlestick, a top reversal candlestick pattern which indicates selling pressure has appeared after a two days rebound. Hence, the FBMKLCI is likely to correct downward or consolidate today if the selling pressure continues. Immediate downside support zone is at 1,842 to 1,829, while the overhead resistance zone is at 1,847 to 1,854.
MACD continued to rise and is approaching the signal-line, indicating further reduction of the bearish momentum. Nonetheless, as MACD is still below the zero-line, current upturn may indicate a technical rebound. RSI (14) hooked downward to 41.1 from 41.9, indicating a mild pullback correction, and the key index is still in a mildly bearish state. Stochastic was higher at 36.4 from 32.6, indicating a continuation of the short term up cycle. Mixed signals from the indicators showed that the FBMKLCI is in a state of consolidation.
The technical picture of the FBMKLCI remained very much unchanged in that the short term trend is sideways, while the medium term trend still remained down. Hence, the FBMKLCI is likely to stay in sideways range-bound for the immediate near term within a range of 1,829 to 1,854 until a breakout is seen on either side of the range. On the broader market, speculative rotational play of the small caps and penny stocks is still alive but the momentum has reduced.
Overnight, the Dow fell 238.19 points or -1.40% to close at 16,804.71. Today, the FBM KLCI is likely to trade within a range of 1,837 to 1,852.
This week's expected range: 1806 – 1874
Today’s expected range: 1837 – 1852
Resistance: 1847, 1850, 1852
Support: 1837, 1840, 1842
Stocks to watch: BORNOIL, CWORKS, EDEN, KINSTEL, KOSSAN, LIIHEN, MMSV, PERDANA, PERWAJA, PTARAS, VITROX
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