Stocks on Bursa Malaysia closed mixed yesterday supported by gains in selected heavyweights. Most Asian shares declined as Greece’s debt talks and the coming two-day Federal Reserve meeting sapped risk appetite. The benchmark FBM KLCI closed almost flat with a marginal gain of 0.08 point to 1,722.24 after hovering between 1,718.44 and 1,726.78 throughout the day. Losers outpaced gainers by 500 to 334, while 297 counters were unchanged. Total volume slipped to 1.53 billion units worth RM1.53 billion from 1.55 billion units worth RM1.52 billion on Monday.
Following the weak performance on Wall Street overnight, the FBM KLCI opened 1.0 point lower at 1,721.16 and slipped lower to hit the intra-day low of 1,718.44 twenty minutes after opening. The key index rebounded from the low and rose to the intra-day high of 1,726.78 at mid-morning. However, the rise did not sustain and the index pulled back to move sideways range-bound for the rest of the day. Chart-wise, the FBM KLCI formed a white spinning-top candlestick which indicates uncertainty of market direction but with a bullish bias, and change is about to take place. The appearance of white spinning-top candlestick after a long black candlestick indicates a change in market sentiment from very bearish to less bearish. Hence, the FBM KLCI is likely to stage a technical rebound today. Immediate overhead resistance zone is at 1,726 to 1,734, while the downside support zone is at 1,718 to 1,706.
MACD was flat, while its histogram contracted upward slightly, indicating a reduction in the bearish downward momentum and a state of consolidation. RSI (14) was marginally higher at 25.88 from 25.8, indicating a mild rebound and the key index is still in the very bearish or oversold state. Stochastic slipped lower to 8.8 from 10.3, indicating consolidation. Readings from the indicators showed that the FBM KLCI is in a state of consolidation in the oversold zone, and hence an oversold rebound is imminent.
The technical picture of the FBM KLCI still remained very much unchanged in that the trend still remained down. Nonetheless, the price action of the key index yesterday showed that buying support was seen at the 1,718-point support level, and the index rebound off it. However, in order to reverse the current downtrend, the FBM KLCI must at least close above 1,745-point, and better still if above 1,753-point, the 23.6% Fibonacci Retracement (FR) level for the range measuring from the pivot high of 1,867.53 to the pivot low of 1,718.44, formed yesterday. On the broader market, trading remained sluggish due to a generally bearish sentiment.
Overnight, the Dow rebounded 113.31 points or 0.64% to close at 17,904.48. Today, the FBMKLCI is likely to trade within a range of 1,709 to 1,735.
This week's expected range: 1708 – 1762
Today’s expected range: 1709 – 1735
Resistance: 1726, 1730, 1735
Support: 1709, 1714, 1718
Stocks to watch: ASDION, ENRA, FBMKLCI-HF, FBMKLCI-HH, FBMKLCI-HK, FBMKLCI-HI, FBMKLCI-HK, GLBHD, HARBOUR, IFCAMSC, KFIMA, PERWAJA, SEM, SGB, SUNZEN
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