Stocks on Bursa Malaysia ended easier yesterday in tandem with regional bourses after a good start to the Lunar New Year. Investors lock in profits after four sessions of rise since before the New Year, with GENTING leading the loser list among the heavyweights. The FBM KLCI opened in the positive territory and traded in a narrow range of 3 points before easing to close 0.07 point or 0.01% lower at 1259. Market breadth was negative throughout the day with losers led gainers by 412 to 233 while 236 counters were unchanged. Volume traded was marginally higher at 598 million shares worth RM998 million.
As it was mentioned in yesterday’s report that the FBM KLCI showed sign of weakness on the occurrence of a shooting-star candlestick the day before, the index continued to be in a profit taking mode yesterday, confirming the earlier signal by forming a black candlestick. Nonetheless, selling pressure was not huge as the body of the black candlestick was small. If the selling pressure in the 1263 to 1265 region can be absorbed, the index might move up further to challenge the higher resistance levels.
MACD continued to move higher in the negative zone with the histogram turning shorter, indicating a continued improvement of the upward momentum in the current downtrend. RSI(14) turned flat at the mildly bearish zone, while Stochastic continued to move up higher. The mixed signals of the indicators reflected the correction mode of the index at current level.
The index might consolidate at current level at it is trapped between overhead resistance zone from 1265 to 1278 and support zone below at 1230 to 1251. A break above 1278 will lead into a bull run, while a break below 1250 may trigger a bear move.
Today, the FBM KLCI is likely to trade within a range of 1253 to 1266.
This week's expected range: 1224 – 1285
Today’s expected range: 1253 – 1266
Resistance: 1261, 1263, 1266
Support: 1253, 1255, 1257
Stock to watch: KPJ
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