Stocks on Bursa Malaysia ended broadly lower yesterday in tandem with weak performances across key regional bourses, as investors took the cue from the fall on Wall Street last Friday. The FBM KLCI opened 2.06 points easier at 1,337.24 and hit the intra-day low of 1326.96 before rebounding to close 5.03 points or 0.38% lower at 1,334.27. Losers overwhelmed gainers by 557 to 187 while 194 counters were traded unchanged. Total turnover dropped to 633 million shares, valued at RM1.008 billion, from last Friday's 682 million shares worth RM1.084 billion.
The price action of the FBM KLCI formed a hammer-like candlestick which indicates buying support when the key index moves into the support zone of 1324 to 1330. The key index is currently below the short term 5, 10 and 30-day moving averages (MA), which now formed the overhead resistance at 1338 to 1341. The immediate critical support for the index lies at 1330 and 1324, if the lower support at 1324 is broken, then the index will move lower to test another support zone at 1321 to 1315.
MACD continued to slide lower indicating the pickup in downward momentum; nonetheless, it is still above its zero-line, signifying the weakness is just a short term consolidation. RSI(14) at 49.31 has cross below the 50 level, and is into the mildly bearish zone. Stochastic at 71.55 has crossed below its slow Stochastic, indicating a down cycle is beginning. Signals from the indicators point to possible further weakness in the near term.
As the FBM KLCI is currently below the short term 5, 10 and 30-day MA, the immediate short term trend is down. The medium and longer term trend as indicated by the 60 and 120-day MA, however, is still up.
As external problems in the Euro zone remained unsettled, on top of the concerns over the credit tightening measures in China, and a lack of fresh leads locally, the local bourse is expected to continue its consolidation in the near term. However, expected better 1Q10 corporate results may help to buffer some selling pressure.
Overnight, DJIA closed 5.67 or 0.05% higher at 10,625.83.
Today, the FBM KLCI is likely to trade within a range of 1321 to 1344.
This week's expected range: 1290 – 1361
Today’s expected range: 1321 – 1344
Resistance: 1337, 1340, 1344
Support: 1321, 1325, 1330
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