Stocks on Bursa Malaysia closed broadly lower yesterday on continued selling pressure tracking the weaker Asian equity markets, as investors remained cautious over the uncertainties of the global economy despite the higher-than expected China import and export data released earlier yesterday. The benchmark FBMKLCI ended sharply lower to close at its intra-day low of 1,797.2 points, down 11.68 points or 0.65%, after rising to a high of 1,808.95 during the day. Market breadth was negative as decliners trounced advancers by 757 to 155 while 237 counters were unchanged. A total of 1.74 billion shares worth RM1.8 billion were transacted compared with 2.22 billion shares worth RM2.34 billion on Friday.
Tracking the bearish performance of Wall Street last Friday, the FBMKLCI opened 0.67 of a point lower at 1,808.21 and slipped lower on continued selling pressure. The key index rebounded at mid-morning to an intra-day high of 1,808.95, however, the rebound found no follow through and the key index continued to slide lower to move sideways range-bound around 1,800 to 1,804 in the afternoon, but a last minutes selling pushed the key index to close at the lowest point of the day. Chart-wise, the FBMKLCI formed a bearish long black candlestick which indicates the bears were in control for the day. Hence, the FBMKLCI is likely to continue to slide lower on follow through selling pressure. Immediate downside support zone is at 1,790 to 1,778, while the overhead resistance zone is at 1,803 to 1,808.
MACD and its histogram continued to slide southward, indicating an increased in the bearish momentum. RSI (14) was lower at 22.8 from 26.3, indicating the key index is getting more bearish. Stochastic was lower at 4.66 from 5.85, indicating continuation of the bearish down cycle and the index is short term oversold. Readings from the indicators showed that the FBMKLCI is in a bearish state and the bearish momentum is likely to push the key index lower.
The trend of the FBMKLCI remained down and bearish and the key index continued to stay below the short, medium and long term moving averages. Judging from the price action of the FBMKLCI yesterday, the key index is likely to continue its current downtrend to slide lower towards the downside targets of 1,778 to 1,785, where 1,778 is the 50% Fibonacci retracement support level for the range measuring from the pivot low of 1,660.39 on August 28th 2013 to the pivot high of 1,896.23 on July 8th 2014, and 1,785 is the 161.8% Fibonacci projection for the wave-C, and the market is likely to see some stronger support around these levels.
Overnight, the Dow fell 223.03 points or -1.35% to close at 16,321.07. Today, the FBM KLCI is likely to trade within a range of 1,781 to 1,820.
This week's expected range: 1753 – 1890
Today’s expected range: 1781 – 1820
Resistance: 1805, 1812, 1820
Support: 1781, 1789, 1793
Stocks to watch: APEX, FBMKLCI-HB, HIL, KOSSAN, MBSB, NIHSIN, SLP, SUCCESS, SUPERMX
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