Stocks on Bursa Malaysia ended on a bearish note yesterday with the benchmark index closed at its lowest level so far this year on persistent selling pressures across the board, in line with the bearish performance of regional markets, impacted by concerns over Greece’s debt default. Sentiment was also affected by the likelihood of Fitch Ratings credit-rating downgrade of Malaysia. The ringgit also hit a 10-year low of 3.7830 per US dollar, its weakest since July 2005. At close, the FBM KLCI fell 18.55 points or 1.08% to settle at 1,691.92, after hitting an intra-day low of 1,688.44. Losers thumped gainers by 823 to 126, with 188 counters unchanged. Total volume increased to 1.67 billion units worth RM1.71 billion from Friday’s 1.35 billion units worth RM1.43 billion.
Following the announcement of capital control by the Greek government on Sunday, the FBM KLCI opened 1.12 points lower with a downside runaway gap at 1,709.35, the intra-day high, and slipped lower for the rest of the day on bearish sentiment. The key index hit the intra-day low of 1,688.44, losing 22.03 points at its worst, before rebounding slightly on late hour bargain hunting to close off low. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates the bears or sellers were in control for the day, and hence, the FBM KLCI is likely to continue its bearish momentum to slide lower today. Immediate downside support zone is at 1,688 to 1,671, while the immediate overhead resistance zone is at 1,700 to 1,710.
MACD slipped lower and is touching the signal-line, making a death-cross, issuing a bearish sell signal. RSI (14) plunged lower to 25.9 from 31.2, indicating the key index is turning very bearish and is oversold. Stochastic was lower at 5.5 from 21.2, indicating the FBM KLCI is very weak and oversold. Readings from the indicators showed that the FBM KLCI is very weak and bearish, and is oversold. Hence, an oversold technical rebound is likely to happen soon.
The trend of the FBM KLCI continued to remain down and bearish as the key index continued to stay below the short, medium and long term moving averages. With the bearish downward move yesterday, the FBM KLCI has broken the 960-day simple moving average (SMA) which gave strong support to the key index on December 17th, 2014, where the key index rebounded strongly from it and rallied for four months to reach the high of 1,867.53 on April 27th, 2015. Based on Elliott wave study and Fibonacci Projection (FP), the current impulse C-wave starting from 1,867.53, after breaking the 161.8% FP level of 1,706.40, has further downside targets of 1,678.76 (200% FP), follow by 1,634 (261.8% FP), 1,606.39 (300% FP) and ultimately 1,516.94 (423.6% FP).
Overnight, the Dow fell 350.33 points or 1.95% to close at 17,596.35. Today, the FBMKLCI is likely to trade within a range of 1,662 to 1,730.
This week's expected range: 1675 – 1761
Today’s expected range: 1662 – 1730
Resistance: 1704, 1717, 1730
Support: 1662, 1675, 1683
Stocks to watch: CHINA50-H1, CHINA-H2, COCOLND, FBMKLCI-HB, FBMKLCI-HG, FBMKLCI-HL, FBMKLCI-HM, HSI-HB, HSI-HE, OMEDIA
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