Stocks on Bursa Malaysia closed mostly lower yesterday as the local bourse consolidates its recent gains. The market lost its momentum after the strong run-up over the last three weeks, however, sustained buying interest in selected banking stocks such as CIMB, AMMB and RHBCAP helped to narrow overall losses. The benchmark FBM KLCI lost 0.99 point or 0.07% to close at 1434.68 after opening 0.44 point higher at 1436.11. Losers led gainers by 370 to 316 while 277 counters were unchanged. Turnover decreased to 743 million shares worth RM1.421 billion from 922 million shares worth RM1.718 billion last Friday.
The FBM KLCI opened 0.44 point higher and traded to the intra-day high of 1440.01 in the first half an hour before profit-taking activities sent it to the intra-day low of 1431.68. Late buying interest on selected heavyweights lifted the index to close off-low. Chart-wise, the key index formed a spinning-top candlestick which indicates indecision of market direction and consolidation. The key index tested the support by the 5-day moving average (MA) at 1433.17 and rebounded off it, if the index can’t hold above 1430 it may come down to test the next lower support by the 10-day MA at 1419.
Daily MACD continued to move higher but is tapering off, as shown by its shorter histogram, indicates a loss in upward momentum. RSI(14) at 77.8 continued to slide lower, indicating a loss in upward strength. Stochastic at 94.2 has crossed below its slow stochastic, however, is still in the overbought zone, reflecting the current state of consolidation.
The underlying short, medium and long term trend of the FBM KLCI remained in the upward direction. For the immediate term, the benchmark index may continue to consolidate or correct downward as indicated by the technical signals. However, the correction may be shallow; hence, it should be viewed as an opportunity to accumulate quality shares at lower price level. Second and third liners may continue to be in rotational play.
The US market was closed for Labor Day holiday yesterday. Today, the FBM KLCI is likely to trade within a range of 1423 to 1448.
This week's expected range: 1389 – 1473
Today’s expected range: 1423 – 1448
Resistance: 1440, 1444, 1448
Support: 1423, 1427, 1431
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