Stocks on Bursa Malaysia ended lower yesterday led by selling on heavyweights. The fall was in tandem with the weak performances of regional markets following Wall Street's slump last Friday on disappointing US jobs data and fears that Hungary could face a debt crisis like Greece's. The FBM KLCI fell 8.12 points or 0.63% to 1,286.27 after opening 9.88 points lower. Losers outpaced gainers by 463 to 151 while 206 counters closed unchanged. Volume fell to 491 million shares worth RM844 million from 674million shares worth RM988 million last Friday.
The FBM KLCI opened with a down gap of 9.88 points lower and lost as much as 15.50 points when it hit the intra-day low of 1278.89, but recovered much of its lost ground as the day progressed, the loss was narrowed to 3.71 points when it hit the intra-day high of 1290.68 before last minute profit-taking sent it to close 8.12 points lower at 1286.27. The price action of the FBM KLCI indicates that there were actually buying on weakness of blue-chip shares when the fearful investors sell out, hence, the key index formed a Doji type candlestick which closed above its mid-point for the day, indicating the buyers were in control.
MACD continued to move higher and has indeed made a golden-cross, which is a buy signal. However, this is a weak buy signal as the cross happened below the zero-line, and reflected just the technical rebound that took place over the last few days, which could be short-lived. RSI(14) at 42.85 has again hooked down and reflected the correction, is in the bearish zone. Stochastic at 51 continued to move higher indicating the short term rebound is still in force. Mixed signals from the indicators point towards a corrective mode of the key index.
The FBM KLCI is now bound on top by the resistance post by the 120-day moving average (MA) at 1298, and is supported below by the 5 and 200-day MA which form the support zone at 1270 to 1276. The short term trend of the key index is range-bound with a downward bias, the long term trend is, however, still up.
In view of a lack of fresh leads locally, the FBM KLCI is expected to continue tracking the performance of the regional key indexes.
Overnight, the Dow closed 115.48 points or 1.16% lower at 9816.49. Today, the FBM KLCI is likely to trade within a range of 1268 to 1297
This week's expected range: 1245 – 1320
Today’s expected range: 1268 – 1297
Resistance: 1290, 1294, 1297
Support: 1268, 1273, 1280
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