Stocks on Bursa Malaysia closed slightly lower on Tuesday, weighed down by losses in selected heavyweight counters in line with weak performance of most regional markets with Japan's Nikkei 225 inched down 0.07% to 14,732.61 and Hong Kong's Hang Seng Index was 0.82% lower at 23,179.04. The benchmark FBM KLCI shed 3.88 points or 0.22% to 1,792.48 after hovering between 1,785.41 and 1,792.48 throughout the day. Losers led gainers by 388 to 372, with 287 counters unchanged. Turnover rose to 1.92 billion shares worth RM1.85 billion from 2.13 billion shares worth RM1.78 billion on Monday.
Taking cue from the weak performance of the Dow overnight, the FBM KLCI opened with a downside gap of 5.58 points lower at 1,790.78 and slipped to the intra-day low of 1,785.41 within the first hour of trading. The key index rebounded from the low and moved higher gradually for the rest of the day to close at the highest point of the day. Chart-wise, the FBM KLCI formed a white hammer candlestick, a bottom reversal candlestick pattern which indicates buying support which reversed the initial selling pressure, and a temporary bottom is seen at 1,785. Hence, the FBM KLCI is likely to consolidate today until a confirmation of the reversal signal is seen. Immediate overhead resistance zone is at 1,793 to 1,805, while the immediate downside support zone is at 1,785 to 1,781.
MACD continued to rise, but the histogram further contracted downward, indicating a reduction in the momentum and the key index is going into a consolidation mode. RSI (14) was lower at 62.7 from 64.8, indicating a mild pullback of the key index and the short term relative strength is still in a bullish state. Stochastic was lower at 91.9 from 95.6, and has cross below the slow stochastic line, indicating the FBM KLCI has entered a correction mode. Readings from the indicators showed that the FBM KLCI is losing its momentum and is in a correction or consolidation mode.
The trend of the FBM KLCI remained up as the key index continued to stay above all the short, medium and long term moving averages. The key index pierced through the 5-day SMA yesterday but rebounded to close above the immediate short term moving averages, indicating there were buying support. The FBM KLCI is likely to continue its consolidation today. However, the second and third liners is likely to continue to be active as shown by the bullish FBMACE and FBMFLG index.
Overnight, the Dow fell 66.79 points or -0.43% to close at 15,334.59. 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: BOILERM, GUNUNG, HIBISCS, HIBISCS-WA, MMODE, PELIKAN, TAS, THHEAVY, THHEAVY-WA