Stocks on Bursa Malaysia extended their losses on Tuesday, in line with regional bourses sell down. The FBM KLCI opened positive but lost ground as the day progressed, and slid sharply after the mid-day break to hit an intra-day low of 1278.10 before rebounding to close off low at 1283.02, losing 13.77 points or 1.06%. Losers overwhelmed gainers by 708 to 152 while 183 counters were unchanged. Volume traded increase to 1.250 billion shares worth RM1.654 billion compared with 996 million shares worth RM1.131 billion on Monday.
Chart wise, the FBM KLCI formed a bearish long black candlestick which reflected the panic sell down in index-linked counters. The benchmark index found support at the 30-day moving average (MA) of 1282 as it bounds to close above it. The next level of critical medium term support is at the 1277 to 1273 zone provided by the 50 and 60-day MA, if the index closes below the 1273 level, it would have become bearish for the medium term technically and more downside can be expected.
On the technical indicators, MACD has crossed below its signal line confirming the short term correction. RSI(14) has crossed below its 50 level, and is short term bearish. Stochastic is also below its 50 level, signifying more downside to come.
Based on the technical signals, the FBM KLCI is short term bearish, neutral in the medium term and the long term is still bullish.
Today, the FBM KLCI is likely to trade within a range of 1270 to 1293.
This week's expected range: 1270 – 1320
Today’s expected range: 1270 – 1293
Resistance: 1286, 1290, 1293
Support: 1270, 1275, 1278
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