Stocks on Bursa Malaysia drifted sideways to lower for most part of yesterday. The FBM KLCI opened higher but slipped into the negative territory to close 1.97 points or 0.15% lower at 1286.10, dragged down by profit-taking in key heavyweights. Market breadth was negative throughout the day with losers led gainers by 402 to 294 while 270 counters were unchanged at the close. Volume was marginally higher at 863 million shares worth RM1.510 billion.
Chart wise, the FBM KLCI formed a bearish engulfing candlestick which indicates selling pressure was heavy and confirmed the bearish signals indicated by the shooting-star candlestick formed the day before. The key index rise to the intra-day high of 1292.35 but was sold down to close lower, signifying the presence of strong resistance at 1292 level.
MACD continued to move higher into the positive territory indicating the increased in upward momentum. RSI(14) at 62.5 hooked down slightly but still in the bullish zone. Stochastic continued to stay flat but remained in the very strong zone. Mixed signals from the indicators signify that the index may correct or consolidate.
The underlying short and long term trend is up, whereas the medium term trend is sideway at the moment. The benchmark index may find immediate support at 1280 and a stronger support at 1272 level.
The market may trade cautiously today while waiting for the announcement on monetary policy decision by Bank Negara, and from the technical side, the FBM KLCI may take a breather first before revisiting the 1300 level.
Today, the FBM KLCI is likely to trade within a range of 1275 to 1299
This week's expected range: 1245 – 1295
Today’s expected range: 1275 – 1299
Resistance: 1291, 1296, 1299
Support: 1275, 1279, 1283
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