Stocks on Bursa Malaysia ended lower on profit-taking while the benchmark index continued to close higher help by gains in key heavyweights such as Genting, Proton and Axiata. The FBM KLCI rose 2.62 points or 0.19% to close at 1405.77, another new high since February 2008, and was up for an eight consecutive days. Losers outpaced gainers by 585 to 266 while 241 counters were unchanged. Turnover increased to 894 million shares worth RM1.65 billion, from 805.113 million shares worth RM1.34 million on Monday.
The FBM KLCI opened 1.07 point higher at 1404.77 and surged to the intra-day high of 1406.95 within the first fifteen minutes, it was followed by heavy profit-taking which sent the key index to the intra-day low of 1399.77. The key index was hovering around 1401 level for a major part of the day and last minute buying on selected key heavyweights helped push the index to close near the day high. Chart-wise, the key index formed a hangman-like candlestick which is a top reversal signal, hence, the index is expected to correct downward.
MACD continued to climb higher indicating the upward momentum is still strong. RSI(14) is higher at 81.5, is seriously overbought, and is tapering off. Stochastic at 98.7 continued to slide lower from yesterday’s reading of 99.3, indicating a loss in upward strength. Signals from the indicators are indicating a seriously overbought situation of the key index, and a correction is expected.
The FBM KLCI is staying above all its short, medium and long term moving averages, and the moving averages are all pointing northeast, indicating a very strong uptrend and very bullish state of the benchmark index, technically. However, do beware of the bear that might have creep in quietly, moreover, regional key indexes were already in correction mode.
As the underlying longer term trend of the FBM KLCI is still strongly pointing up, a short term correction should be viewed as an opportunity to accumulate quality stocks at lower price level. Overnight, the Dow fell -133.96 points or -1.32% lower to close at 10,040.45. Today, the FBM KLCI is likely to trade within a range of 1394 to 1414.
This week's expected range: 1347 – 1436
Today’s expected range: 1394 – 1414
Resistance: 1408, 1411, 1414
Support: 1394, 1397, 1401
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