Stocks on Bursa Malaysia ended lower yesterday, weighed down by losses in PETRONAS related counters, with the benchmark FBMKLCI closing 7.28 points or 0.4% easier at its intra-day low of 1,833.54 points after hitting intra-day high of 1,849.47 points earlier in the morning. Market breadth was negative with decliners outpacing gainers by 804 to 159 while 210 counters were unchanged. Total volume increased to 2.18 billion shares worth RM2.07 billion compared with Friday's 1.71 billion shares worth RM1.5 billion.
The FBMKLCI opened 5.75 points higher at 1,846.57 and surged to hit the intra-day high of 1,849.47 in the first ten minutes after opening. However, the upward move found no follow through and the key index pullback on heavy profit-taking but rebounded to stay range-bound in the positive territory throughout the morning session. Heavy selling pressure which emerged in the afternoon sent the key index lower to close at the lowest point of the day. Chart-wise, the FBMKLCI formed a bearish engulfing candlestick pattern which indicates the bears or sellers were in control for the day. Hence, the FBMKLCI is likely to continue its downward momentum to slip lower today. Immediate downside support zone is at 1,820 to 1,829, while the overhead resistance zone is at 1,840 to 1,849.
MACD hooked downward and is below the signal-line, and its histogram also extended downward, indicating an increased in the bearish momentum. RSI (14) hooked downward to 34.4 from 39.2, indicating the key index is turning more bearish. Stochastic was lower at 26.8 from 32.4, indicating a resumption of the down cycle. Readings from the indicators showed that the FBMKLCI is turning more bearish, and is likely to slip lower.
The trend of the FBMKLCI remained down and bearish as the key index continue to stay below the short, medium and long term moving averages. With yesterday’s bearish downward move, the FBMKLCI is likely to slide lower to test the long term support of 300-day simple moving average (SMA) currently at 1,829 which coincides with the pivot low formed on September 26th, and the 360-day SMA support currently at 1,818-point level, and a break of these long term moving average supports will likely see the FBMKLCI coming under strong selling pressure and moving into a bearish phase. Based on Elliott wave study, the FBMKLCI is currently in the impulse wave-C which has a possible downside target of 1,821, the 100% projection, follows by 1,805, 1,799 and 1,785.
Overnight, the Dow fell 272.52 points or -1.60% to close at 16,719.39. Today, the FBM KLCI is likely to trade within a range of 1,812 to 1,865.
This week's expected range: 1817 – 1870
Today’s expected range: 1812 – 1865
Resistance: 1844, 1854, 1865
Support: 1812, 1822, 1828
Stocks to watch: CENSOF, GESHEN, HIL, IFCAMSC, JIANKUN, KPJ, TALIWRK, WPRTS
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.