Stocks on Bursa Malaysia extended their losses to close lower yesterday on weaker buying support due to the hefty fall on Wall Street overnight and a lack of fresh leads ahead of the Budget 2015 announcement next week also sent some traders away as the market awaited a new direction. The benchmark FBMKLCI finished 7.64 points or 0.41% lower at 1,837.68, after opening 0.15 of a point lower at 1,845.17 and moved between 1,837.55 and 1,845.86 throughout the day. Decliners outpaced gainers by 732 to 179, while 232 counters were unchanged. A total of 2.13 billion shares were transacted worth RM1.9 billion, down from 2.22 billion shares valued at RM1.64 billion on Wednesday.
Following a heavy fall of the Dow overnight, the FBMKLCI opened 0.15 of a point lower at 1,845.17 and rebounded to hit the intra-day high of 1,845.86 briefly after opening. The key index fell on persistent selling pressure throughout the day to hit the intra-day low of 1,837.55 before rebounding slightly to close off low. Chart-wise, the FBMKLCI formed a bearish black candlestick which indicates the bears or sellers were in control for the day, and the candlestick also confirmed the reversal signal issued by the bearish hangman candlestick formed the previous day. Hence, the FBMKLCI is likely to further correct downward today if the selling pressure continues into today. Immediate downside support zone is at 1,836 to 1,829, while the overhead resistance zone is at 1,845 to 1,850.
MACD hooked downward and its histogram also extended southward after contracting upward for six consecutive sessions, indicating the rebound has ended and a resumption of the bearish downward momentum. RSI (14) plunged to 35.6 from 41.1, indicating the short term relative strength of the FBMKLCI has again turned bearish. Stochastic hooked downward to 32.1 from 36.4 and crossed below the slow stochastic line, indicating an end to the short term up cycle and the beginning of another down cycle. Readings from the indicators showed that the FBMKLCI is in a bearish mode, and is likely to further consolidate.
The trend of the FBMKLCI remained down and bearish as the key index is staying below the short, medium and long term moving averages. With the bearish downward move yesterday, the FBMKLCI has again closed below the 5, 10 and 240-day simple moving average (SMA), strengthening the bearish view of the key index. Hence, the FBMKLCI is likely to further consolidate today ahead of a long weekend as the coming Monday is a public holiday for Hari Raya Aidiladha.
Overnight, the Dow fell 3.66 points or -0.02% to close at 16,801.05. Today, the FBM KLCI is likely to trade within a range of 1,826 to 1,854.
This week's expected range: 1806 – 1874
Today’s expected range: 1826 – 1854
Resistance: 1843, 1848, 1854
Support: 1826, 1832, 1834
Stocks to watch: BTM, GREENYB, GHLSYS, JIANKUN, PANTECH, PELIKAN, SEM, WZSATU
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