Stocks on Bursa Malaysia ended broadly lower yesterday, dragged by profit-taking activities in selective heavyweights amid the lack of market moving impetus. The FBM KLCI ended 0.95 point or 0.07% easier at 1,359.71, after opening 0.01 point lower at 1,360.65. Losers outpaced gainers by 409 to 255 while 281 counters were unchanged. Volume declined further to 675 million shares worth RM1.132 billion, from 699 million shares worth RM1.065 billion on Monday.
The FBM KLCI opened 0.11 point higher and traded to the intra-day high of 1362.24, profit-taking activities sent it to the intra-day low of 1357.95 before last minute buying of selected heavyweights lifted it to close a marginal 0.95 point lower. It formed a black spinning-top candlestick which indicates consolidation with a downward bias. The key index is now closing below its short term 5 and 10-day moving average (MA), hence, it might continue to move lower on selling pressure. Immediate support for the key index is at 1355 and 1350 while its overhead resistance is at 1370.
MACD continued to slide lower indicating the gain in downward momentum, and the MACD has just made a dead-cross over its signal line, giving out a sell signal. RSI(14) at 66.7 continued to slide lower but is still in the bullish zone, is gradually losing its bullishness. Stochastic at72.7 continued to slide lower indicating the down cycle is in force. Signals from the indicators are pointing toward a weak outlook and further downward correction is expected of the FBM KLCI.
The short term trend is on the verge of reversing downward as indicated by the 5-day MA; while the medium and long term trend remained up. Immediate support zone is at 1350 to 1358 while the immediate overhead resistance zone remained at 1366 to 1370.
In view of the start of the Ramadan month today and a lack of market moving impetus, the FBM KLCI is expected to continue its sideways course. Rotational play on lower liners is expected to remain active.
Overnight, the Dow fell -54.50 points or -0.51% to close lower at 10,644.25. Today, the FBM KLCI is likely to trade within a range of 1353 to 1368.
This week's expected range: 1339 – 1383
Today’s expected range: 1353 – 1367
Resistance: 1362, 1364, 1367
Support: 1353, 1355, 1357
Stock to watch: XINQUAN, XDL, MSPORTS, REDTONE
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