As expected, FBM KLCI continue to slide lower yesterday in tandem with continued weakness in regional bourses. The FBM KLCI was among the least affected benchmark indices, dropping 7.3 points, or -0.58% to close at 1241.75., dragged down mostly by banking and plantation stocks. Losers led gainers by 464 to 216 while 233 counters were unchanged. Turnover was lower at 933 million shares.
KLCI opened on Thursday with gap down of 5.01 points at 1244.04 and rapidly break the support at 1238 to hit the day’s low of 1236.20 on panic selling. Very quickly the index rebounded to above 1238, the key support level, and was hovering around the level for most of the day. Late afternoon buying pushes the index to close at 1241.75. The price action of the index formed a hammer candlestick pattern, which indicates possible bottom. The 30-days moving average is lending the index a strong support at this level.
MACD continued to slide down, indicating continued weakening of market momentum. RSI(14) at 53 has slide from the overbought zone to the neutral zone. Stochastic continued to slide toward the 50 level. All three indicators are indicating a weak market at the moment.
The current short term trend of the KLCI is down; however, the medium and long term trend as indicated by the 60 and 120 days moving average is still up. As such, the current down trend is viewed as a healthy correction to the recent run up which lasted for almost three weeks since October 5.
Today, the FBM KLCI is expected to trade within the range of 1233 to 1252, with immediate support at 1237, 1233 and 1229. Overhead resistance is expected at 1245, 1248 and 1252.
This week's expected range: 1244 – 1285
Today's expected range: 1233 – 1252
Resistance: 1245, 1248, 1252
Support: 1229, 1233, 1237
Stock to watch: SILKHLD
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