Stocks on Bursa Malaysia closed broadly lower yesterday on profit-taking activities after previous day's gains. The FBM KLCI lost 7.45 points or 0.43% to close at 1,716.76 after opening 1.34 points better at 1,725.55, and moved between 1,702.57 and 1,725.55 throughout the day. Losers trounced gainers by 431 to 277, with 291 counters unchanged. Turnover stood at 1.47 billion shares worth RM1.81 billion against 1.36 billion shares worth RM1.51 billion on Tuesday.
Taking cue from the positive gains on Wall Street overnight, the FBM KLCI opened 1.34 points higher at 1,725.55 but slipped lower on heavy profit-taking activities to the intra-day low of 1,702.57 within the first twenty minutes after opening, losing 21.64 points at its worst. The key index rebounded from the low to gradually climb higher on bargain hunting activity to eventually settled at 1,716.76. Chart-wise, the FBM KLCI formed a bearish black hanging-man candlestick, a single day top reversal candlestick pattern which indicates selling pressure has appeared but the buying support was able to digest most of the selling. Hence, the FBM KLCI might continue to consolidate today . Immediate downside support zone is at 1,702 to 1,698 while the overhead resistance zone is at 1,725 to 1,732.
MACD continued to climb higher but is still below the signal line, and its histogram also further contracted upward, indicating a further reduction in the bearish downward momentum. Nevertheless, as MACD is still below the zero-line, the current up move might indicates just a technical rebound. RSI (14) hooked downward to 38.8 from 41, indicating the short term relative strength of the key index has again turned bearish from a mildly bearish state. Stochastic hooked downward gently to 43.4 from 44.9, indicating mild selling pressure and a possible reversal of the short term up cycle. Mixed signal from the indicators showed that the FBM KLCI is in a state of consolidation, and is likely to continue to consolidate until clear breakout signal is seen.
The immediate short term trend of the FBM KLCI has turned sideways range-bound as the key index is now sitting above the 5 and 10-day SMA but is below the 15, 20 and 30-day SMA. The medium term trend remained down, but the much long term trend is still up. The FBM KLCI is likely to move sideways range-bound within an immediate short term range of 1,698 to 1,732 until a clear breakout is seen.
Overnight, the Dow rose +96.91 points or +0.65% to close at 14,930.87. Today, the FBM KLCI is likely to trade within a range of 1,681 to 1,748.
This week's expected range: 1634 – 1778
Today’s expected range: 1681 – 1748
Resistance: 1727, 1738, 1748
Support: 1681, 1691, 1704
Stocks to watch: IRCB, IRCB-WA, JAKS, KPS, PUNCAK, SALCON, SALCON-WA, SUPERMX, YLI