Stocks on Bursa Malaysia ended last Friday on a positive note, supported by gains in selected blue-chips. The FBM KLCI gained 2.83 points or 0.16% to close at 1,723.8 after opening one point lower at 1,719.97 and moved between 1,719.83 and 1,726.28 throughout the day. However, on a weekly basis, the benchmark index lost 3.78 points from previous Friday's 1,727.58. Gainers led losers by 352 to 339, while 280 counters were unchanged. Turnover stood at 1.1 billion shares worth RM1.45 billion against 1.59 billion shares worth RM1.66 billion on Thursday, and weekly turnover declined to 6.6 billion shares valued at RM7.62 billion from previous week's 9.490 billion shares valued at RM12.550 billion.
The FBM KLCI opened last Monday 3.81 points lower at 1,723.77 and slipped lower to the intra-day low of 1,714.95. It rebounded slightly from the low and moved sideways for the rest of the day to close 10.02 points lower at 1,717.56. Tuesday saw the key index rebounded to touch the intra-week high of 1,727.94 before pulling back on profit-taking activity to close 6.65 points higher at 1,724.21. The FBM KLCI opened 1.34 points higher on Wednesday at 1,725.55 but slipped lower on heavy profit-taking activities to the intra-week low of 1,702.57, losing 21.64 points at its worst before rebounding to close 7.45 points lower at 1,716.76. Thursday saw a mild rebound in the key index with a gain of 4.21 points to close at 1,720.97 after moving between 1,718.56 and 1,723.69 throughout the day, and the rebound continued into Friday with another gain of 2.83 points.
On the weekly chart, the FBM KLCI formed a Doji candlestick with a long lower shadow which indicates uncertainty of market direction but with good buying support. The lower shadow of last week's Doji candlestick was short than the previous candlestick's lower shadow, indicating last week's selling pressure was weaker compared with previous week. On the daily chart, the FBM KLCI formed a small white candlestick which indicates consolidation as it continued to move within last week's sideways range. Hence, the FBM KLCI is likely to consolidate in a sideways range-bound manner in the coming week within a range of 1,702 to 1,740.
Weekly MACD and its histogram continued to slide lower, indicating a further loss in the weekly momentum. Daily MACD, however, has just made a golden-cross over the signal line, issuing a buy signal, but the buy signal must be taken with caution as the MACD is still in the bearish zone. Weekly RSI (14) hooked downward to 46.7 from 47.5, indicating the weekly relative strength still in the mildly bearish state. Daily RSI (14) was higher at 42 from 40.7, indicating the daily relative strength of the FBM KLCI is still in a mildly bearish state. Weekly Stochastic continued to slip lower to 35 from 41.8, indicating weak market strength and continuation of the down cycle on the weekly chart. Daily Stochastic continued to climb higher to 48.3 from 45.7, indicating an improving market strength and continuation of the up cycle on the daily chart. In short, indicators' readings from the weekly chart showed a still bearish outlook, whereas from the daily chart, signs of improvement are seen, however, more confirmation signals are needed.
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 still below the 15,20 and 30-day SMA. The medium to long term trend is still down as the key index continues to stay below the 50, 60 ,100 and 120-day SMA. Nevertheless, the much longer term uptrend is still intact. The FBM KLCI tested the support of the 200-day SMA last week when it hit the 200-day SMA at 1,702 and rebounded from it, indicating there was some long term buying support for the FBM KLCI when the key index comes near the 1,700-point psychological support level. Having said so, the threat of a downtrend is not fully remove yet at this moment until the FBM KLCI is able to close above the 1,766-point level, the highest moving average resistance level represented by the 50-day SMA at the moment. On the flip side, if the FBM KLCI continues to slide lower and break the 1,700-point psychological support level, it will trigger another round of panic selling which will see the FBM KLCI re-testing the critical support of 1,660.
Last Friday, the Dow fell 14.98 points or -0.10% to close at 14,922.50. This week, the FBM KLCI is likely to trade within a range of 1,682 to 1,753, and today, the FBM KLCI is likely to trade within a range of 1,713 to 1,733.
This week's expected range: 1682 – 1753
Today’s expected range: 1713 – 1733
Resistance: 1727, 1730, 1733
Support: 1713, 1716, 1720
Stocks to watch: FABER, INARI, OGAWA, PESONA, PRLEXUS, PRTASCO