Shares on Bursa Malaysia continued their consolidation last week. The FBM KLCI opened last Monday at 1259.66 and traded in a narrow range of 16 points for the holiday shortened week, and closed on last Thursday at 1266.97, posting a week-on-week gain of 6.97 points. Due to the holiday mood where most players were sidelined, volume shrank to 2.388 billion shares worth RM3.456 billion compared with the 3.035 billion shares worth RM4.142 billion the previous week.
Chart wise, the FBM KLCI was into its fifth week of consolidation in the absence of fresh leads and long school holidays. The index formed a small white candlestick which indicates consolidation. It rested right on the 10-weeks moving average which has been providing support to the uptrend since April, and it is in a critical condition now as a close below 1260 will see the index turning weak and may head towards the south.
The weekly MACD continued to slide down further. The weekly RSI was up slightly, and the weekly Stochastic has just slid below the 80 level to 78.87. This is the first time the weekly Stochastic has come below the 80 level since April this year, and it may signify further weakness ahead.
On the daily chart, the FBM KLCI formed a black Spinning Top candlestick which indicates indecision of the index to move up further. The index has in fact hover at this level for three days and is resting right on the 30-days moving average. The 1270 has proved to be a strong resistance level.
Daily MACD has gone sideways, RSI slid down further at 52.88 and Stochastic has turned flat at 80.97 which indicate a loss of upward momentum, and the index may turn to move southward again.
The short term trend of the FBM KLCI has turned sideways, and it is going to be range-bound. The longer term trend is up as indicated by the 60 and 120-days moving average.
For this week, the FBM KLCI may trade sideway or range-bound with a downward bias within a range of 1241 to 1281. As for today, the FBM KLCI is expected to trade within a range of 1257 to 1275.
This week's expected range: 1241 – 1281
Today’s expected range: 1257 – 1275
Resistance: 1269, 1271, 1275
Support: 1257, 1261, 1264
Stock to watch: AFG
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