Stocks on Bursa Malaysia ended broadly lower yesterday, dragged down by losses in heavyweights amid weaker regional bourses and lack of positive news locally. The FBM KLCI declined 6.8 points or 0.5% to 1352.91 after opening 0.12 point lower at 1359.59. Losers outnumbered gainers by 464 to 207 while 279 counters were traded unchanged. Volume, however, increased to 769 million shares worth RM1.169 billion from 675 million shares worth RM1.132 billion on Tuesday.
The FBM KLCI opened 0.12 point lower at 1359.59 and was trading in the negative territory throughout the day, heavy profit-taking activities sent the key index to the intra-day low of 1349.50 before bargain hunting activities lifted it to close off low at 1352.91. Chart wise, the key index formed a bearish black candlestick which indicates the bear was in control, and further weakness is expected ahead before any sign of bottoming is seen.
The key index tested the support of the 1350 psychological level and bounces off it, and a re-test is expected, if it cannot hold, the key index is then likely to come down to the 30-day moving average (MA) support level at 1340, which is a critical support level in order to maintain the current short term uptrend of the FBM KLCI.
MACD continued to slide lower after making the dead-cross yesterday, indicating the picking up in the downward momentum. RSI(14) at 57.5 plunged lower into the neutral zone indicating a weakening of the short term market strength. Stochastic at 63.5 continued to slide lower indicating the downward move is picking up steam. Signals from the indicators are pointing toward a bearish outlook of the key index, and more weaknesses are expected ahead.
As the 5-day MA has crossed below the 10-day MA, a short term down trend has begun. However, the medium and longer term trend remained up. Immediate downside support for the key index now lies at 1340 to 1350 while the overhead resistance zone is at 1360 to 1370.
In view of a lack of fresh market impetus, the FBM KLCI is expected to continue its correction and consolidation mode after the recent rally to the high of 1370, and will continue to track the performance of key regional indexes.
Overnight, the Dow fell -265.42 points or -2.49% to close lower at 10,378.83. Today, the FBM KLCI is likely to trade within a range of 1338 to 1364.
This week's expected range: 1339 – 1383
Today’s expected range: 1338 – 1364
Resistance: 1355, 1359, 1364
Support: 1338, 1343, 1348
Stock to watch: TMCLIFE
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