Stocks on Bursa Malaysia closed easier on thin trading yesterday. The FBM KLCI traded in a narrow range, moving between 1,323.62 and 1,326.06 before closing 0.91 point or 0.07% lower at 1325.54. Losers led gainers by 340 to 277 while 240 counters were unchanged. Volume decreased to 535 million shares worth RM778 million from 568 million shares valued at RM922 million last Friday.
Chart wise, the FBM KLCI formed a small dragon-fly Doji candlestick, which indicates consolidation and low volatility. As it was mentioned in previous analysis, the key index is now trapped in a consolidation zone with overhead resistance zone at 1330 to 1350 and an immediate support zone at 1300 to 1318. It might continue to drift within a narrow range.
MACD moved higher, but tapering-off with its histogram turned shorter, indicating a reduction in the upward momentum, and reflecting the current consolidation mode of the key index. RSI(14) at 59.4 is marginally lower and has slipped into the mildly bullish zone. Stochastic at 81.8 is slipping lower, albeit still above the 80 level, reflecting the current consolidation mode of the key index.
The FBM KLCI is currently closing below its very short term 5-day moving average, but is still above its short term 10-day MA, hence, short term the FBM KLCI is likely to move sideways. The underlying long term uptrend remained intact.
In view of the diminishing volume, the market is likely to remain quiet for a while and will continue to track the performance of regional markets. Overnight, the Dow closed -5.29 points or -0.05% lower at 10,138.52. Today the FBM KLCI is likely to trade within a range of 1320 to 1330.
This week's expected range: 1293 – 1352
Today’s expected range: 1320 – 1330
Resistance: 1326, 1328, 1330
Support: 1320, 1322, 1324
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