Stocks on Bursa Malaysia ended mostly lower in a steadier trade yesterday after the plunge on Wednesday. The FBM KLCI fell 4.07 points or 0.3% lower to close at 1,304.16 after opening 3.37 points lower at 1,304.86. It had traded within the range of 1,300.44 and 1,309.13. Losers outpaced gainers by 449 to 250 while 274 counters were unchanged. Volume was slightly lower at 765 million shares worth RM1.414 billion.
The price action of the FBM KLCI formed a Doji candlestick, which indicates indecision and uncertainties of the market. The benchmark index tested the psychological support at 1300 before rebounding to close off low. However, the 1300 level looks fragile, if it can’t hold, the index may come down to its next lower support at 1292.
MACD continued to slide lower and is below its zero-line, indicating the downward momentum is gaining strength. RSI(14) at 31.38 is very weak and is in the bearish zone. Stochastic at 15.61 continued to slide lower into the short term oversold zone, this actually indicates the downward momentum is really gaining strength. Signals from the indicators are pointing towards more weaknesses ahead for the benchmark index.
As the FBM KLCI is now below it short and medium term moving averages (MA), the current trend is down. The longer term trend as indicated by the 120 and 200-day MA, nevertheless, is still up. The 120-day MA is currently at 1297 and the 200-day MA is at 1265.
In view of the bearish sentiments looming around global markets, the local bourse is expected to continue tracking the performances of regional markets. However, the expected better 1Q10 corporate results may give some buffer to the market.
Overnight, DJIA closed 376.36 points or 3.6% lower at 10,068.01.
Today, the FBM KLCI is likely to trade within a range of 1291 to 1313.
This week's expected range: 1290 – 1361
Today’s expected range: 1291 – 1313
Resistance: 1307, 1310, 1313
Support: 1291, 1296, 1300
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