Stocks on Bursa Malaysia ended broadly lower yesterday in tandem with the weak performances of the regional markets. The FBM KLCI ended 2.04 points or 0.16% lower to close at 1282.97 after opening 0.76 point lower, and lost as much as 10.45 points before last minute buying lift it off low to close just marginally lower. Losers outpaced gainers by 487 to 200 while 214 counters were unchanged. Volume was lower at 653 million shares worth RM758 million.
The price action of the FBM KLCI yesterday formed a hanging-man candlestick, which is a top reversal signal especially after a strong rise, it indicates heavy selling initially but late buying support lifted the price to close off-low. The key index is now blocked on top by the short term 10-day moving average (MA) and the overhead resistance zone at 1290 to 1300. The immediate lower support zone lies at 1268 to 1250.
MACD continued to move higher but is still below the zero-line, which indicates the current up move is just a technical rebound. RSI(14) at 39.23 is still in the bearish zone, has hooked down slightly reflecting the pull-back of the index. Stochastic continued to move higher reflecting the rebound of the index but is still in the weak zone.
Despite the rebound last three days, the FBM KLCI is still in a short term down trend, as it is still staying below the short term 10-day MA. The underlying long term trend as indicated by the long term 240 and 360-day MA is still up.
The FBM KLCI is currently in a critical position, as a break below the 1250 level could trigger-off a confidence crisis which can lead into another round of sell down, which will see the key index slides toward the 1200 level.
Overnight, the Dow closed 112.61 points or 1.11% lower at 10024.02. Today, the FBM KLCI is likely to trade within a range of 1267 to 1290.
This week's expected range: 1208 – 1305
Today’s expected range: 1267 – 1290
Resistance: 1285, 1288, 1290
Support: 1267, 1271, 1277
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