Shares on Bursa Malaysia continued to trend sideways last week in the absence of fresh leads. The FBM KLCI traded in a narrow range of 5.95 points between the week’s high of 1274.77 and the low of 1268.82, and ended the week on last Thursday at 1270.61, losing 3.75 points or 0.29% week-on-week. Weekly volume turnover was down to 3.0858 billion shares from 5.2742 billion shares the previous week.
On the weekly chart, the FBM KLCI hit the year high of 1288.42 the week before last week and pulled back to close near the week’s low at 1274.36 forming a shooting star-like candlestick which may forewarn weakness ahead, as mentioned in last Monday’s report. True enough; the key index went into a consolidation mode last week, forming a Doji candlestick which indicates uncertainties ahead.
Weekly MACD has crossed below its trigger line, indicating the weakening of market momentum. Weekly RSI and Stochastic also slid down marginally, but still remain in the bullish zone.
The underlying uptrend as indicated by the moving averages is still remained up. The short term 10-weeks moving average which has been providing support to the current uptrend, may provide cushion to the index at the 1250 level.
On the daily chart, the KLCI has moved below the short term 10-days moving average indicating short term weakness. This is supported by the daily MACD, RSI and Stochastic that are moving southward, indicating possible further weakness ahead.
The 30-days medium term moving average which is now at 1263 may lend some immediate support to market weakness. If the 1260 level is broken, it may trigger some short term panic selling that may pull the index down to the 1250 or 1230 level. The longer term trend as indicated by the 60 and 120 days moving average is, however, still trending up.
Due to the “Dubai factor”, the key index is expected to be more volatile and may trade in a much wider range with a downward bias.
Today, the FBM KLCI is expected to trade within the range of 1250 to 1278
This week's expected range: 1230 – 1281
Today's expected range: 1250 – 1278
Resistance: 1273, 1276, 1278
Support: 1250, 1260, 1263
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