Stocks on Bursa Malaysia suffered five consecutive days of losses last week, in line with the weak performances of regional markets following a negative spate of news on the global economic front, and concerned with China's economy after the pace of Chinese manufacturing growth slowed in June. The FBM KLCI loss 19.01 points, week-on-week, to 1,307.44 compared with 1,326.45 the previous Friday. A total of 3.024 billion shares worth RM4.822 billion were traded last week, down from 3.596 billion shares valued at RM5.733 billion the week before.
On the weekly chart, the benchmark FBM KLCI formed a bearish black candlestick, which confirmed the reversal signal generated by the shooting-star candlestick formed the week before. Hence, the benchmark index may continue its downward move this week to test the psychological support at 1300. The immediate critical support level is at 1297, provided by the 30-week moving average (MA). If this support level is broken, then we may see the key index sliding lower towards the 1280 level, which is where the 200-day MA is now.
On the daily chart, a bearish Head-and-shoulder chart pattern is in the formation. Its neckline now lies at 1250 level. If the benchmark index could not hold well above the current level, then it might move lower to test the lower support levels at 1283 and 1264 provided by the 200-day and 240 day MA, and ultimately the neckline support at 1250. Technically, if the neckline is broken, the downside target for the Head-and-shoulder pattern is at 1140.
Weekly MACD continued to slide lower after turning up slightly the previous week, indicating the index is losing its longer term momentum. Daily MACD has just made a dead-cross over its signal line, confirming the short term bearish outlook of the key index. Weekly RSI(14) at 53.7 continued to move lower into the neutral zone, whereas daily RSI(14) at 47.7 has already move into the mildly bearish zone. Weekly Stochastic at 69 continued to move higher, whereas the short term daily Stochastic at 36.9 has moved lower, reflecting the current short term correction of the key index. Signals from the indicators, both short and long term, are pointing towards further downward correction of the FBM KLCI.
The short term trend of the FBM KLCI has turned southward, but the long term trend remained up. However, the long term moving averages are converging fast, indicating a loss in the long term upward momentum, which is a bad sign.
With no fresh market leads locally, and the continued concerns over the global economy's health which would continue to dampen investor sentiment, the benchmark FBM KLCI is likely to continue its consolidation mode with a downward bias, and will track the performance of the regional markets.
The Dow closed -46.05 points or -0.47% lower on last Friday at 9,686.48. This week, the FBM KLCI may trade within a range of 1260 to 1341, and for today it is likely to trade within a range of 1299 to 1313.
This week's expected range: 1260 – 1341
Today’s expected range: 1299 – 1313
Resistance: 1309, 1311, 1313
Support: 1299, 1303, 1305
No comments:
Post a Comment