Stocks on Bursa Malaysia closed lower yesterday on lack of buying momentum especially in selected heavyweight counters. The weak movement of the key index was also influenced by soft regional markets on fresh concerns over the US Federal Reserve's policy on its bond-buying program. The benchmark FBM KLCI shed 5.47 points or 0.3% to 1,796.36 after hovering between 1,793.28 and 1,800.3 throughout the day. Losers led gainers by 390 to 357, with 319 counters unchanged. Turnover eased to 2.13 billion shares worth RM1.78 billion from last Friday's 2.39 billion shares worth RM2.44 billion.
Taking cue from the 185 points loss of the Dow last Friday, the FBM KLCI opened 6.04 points lower at 1,795.79 and slipped to the intra-day low of 1,793.28 within the first thirty minutes of trading. The key index rebounded and rallied to the intra-day high of 1,800.30 at mid morning, but could not sustained and slip into a sideways consolidation. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick which indicates uncertainty of market direction amid consolidation. Hence, the FBM KLCI is likely to continue to consolidate today with immediate overhead resistance zone at 1,800 to 1,805, while the immediate downside support zone is at 1,793 to 1,787.
MACD continued to rise, but its histogram contracted, indicating consolidation. RSI (14) hooked downward to 64.8 from 67.8, reflecting the pullback correction of the key index, and the short term relative strength is still in the bullish zone. Stochastic was higher at 95.6 from 95.1, indicating the short term up cycle is still intact. Readings from the indicators showed that the FBM KLCI is still in a bullish state amid a mild correction.
The trend of the FBM KLCI remained up, and the pulled back yesterday showed be viewed as a healthy correction after a strong run up. The key index should resume its upward move after taking a breather. At the mean time, the third liners will continue to stay active as shown by a strong FBMACE index.
Overnight, the Dow fell 49.71 points or -0.32% to close at 15,401.38. Today, the FBM KLCI is likely to trade within a range of 1,785 to 1,807.
This week's expected range: 1756 – 1828
Today’s expected range: 1785 – 1807
Resistance: 1800, 1803, 1807
Support: 1785, 1789, 1793
Stocks to watch: CENSOF, CENSOF-WA, DIGISTA, DIGISTA-WA, DIGISTA-WB, FARLIM, HOVID, HYTEXIN, PELIKAN, STEMLFE, TAS, TMS