Stocks on Bursa Malaysia ended broadly lower yesterday, in line with weak performance of regional market amid concerns over Greece’s deteriorating debt situation and Dow’s 213 points fall overnight. The FBM KLCI lost 6.55 points to close at 1,333.17 after opening 9.19 points lower at 1,330.53. The benchmark index lost up to 15.38 points in the morning but recovered much of its lost ground. Losers outpaced gainers by 472 to 236 while 276 counters were unchanged. Turnover was lower at 831 million shares worth RM1.117 billion.
The FBM KLCI opened yesterday on fear with a down gap of 9.19 points at 1330.53 and lost up to 15.38 points when it hit the intra-day low of 1324.34 in the early part of the morning. The key index recovered much of its lost ground as buying support came in and pushed the index to its intra-day high of 1335.95 before last minute profit taking sent it lower to close at 1333.17. The price action of the key index formed a white spinning-top like candlestick with a longer lower shadow which indicates the bulls were in control of yesterday’s battle after losing ground earlier.
The FBM KLCI is now trapped with overhead resistance at 1335 to 1337 post by the 5 and 10-day moving average (MA) and supported below by the 30-day MA at 1327 when it rebounded off it. Hence, the key index might continue to consolidate in its earlier consolidation range of 1330 to 1344.
MACD dropped further, indicating the increase in downward momentum. RSI(14) at 54.35 dropped further and is into the neutral zone now. Stochastic has hooked down, albeit has not crossed its slow Stochastic. Signals from the indicators are pointing towards further consolidation of the key index.
The short term trend as indicated by the 5 and 10-day MA is now sideways, while the underlying medium to longer term uptrend still remained intact.
In view of a lack of market moving impetus, the benchmark FBM KLCI will continue to consolidate and track the performance of regional bellwether indices, while the second and third liners will be on rotational play.
Today, the FBM KLCI is likely to trade within a range of 1322 to 1345.
This week's expected range: 1308 – 1358
Today’s expected range: 1322 – 1345
Resistance: 1337, 1341, 1345
Support: 1322, 1326, 1331
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