Stocks on Bursa Malaysia ended off its low yesterday with buying in Genting, AirAsia and DiGi helping to lift the market amid bearish sentiment and declines across regional bourses, following Dow’s loss of more than 1% overnight. The FBM KLCI fell a marginal 1.87 points or 0.13% to 1486.78. It had opened lower by 8.33 points at 1480.32 and dropped as much as 12 points earlier in the day. Decliners outnumbered advancers by 408 to 385, while 293 counters were unchanged. Overall volume declined to 1.488 billion shares worth RM1.802 billion from Tuesday’s 1.499 billion shares worth RM1.819 billion.
The FBM KLCI opened with a down gap of 8.33 points at 1480.32 following DJIA’s loss of 165 points or 1.48% overnight. It plunged to the intra-day low of 1476.56, losing as much as 12.09 points at its worst, but recovered gradually as the day progressed and touched the intra-day high of 1490.03 before late profit-taking sent the key index to close off high.
Chart-wise, the FBM KLCI formed a piercing-line candlestick which indicates the fight back of the bull after retreating on the bear’s attack. As mentioned in yesterday’s analysis, the resistance at 1490.51 posted by the 5-day moving average (MA) has indeed stopped the key index from advancing further, and the key index had continued to close below the short term 5 and 10-day MAs.
MACD continued to slide lower, indicating the continued increase in downward momentum. RSI (14) at 62.6 has again hooked downward, nonetheless, it is still in the mildly bullish zone. Stochastic at 57 also continued to slide lower, indicating a continued weakening of the short term momentum and the down cycle is still in force. Signals from the indicators are pointing towards a likely further consolidation and range-bound for the FBM KLCI. Having said so, the candlestick on the other hand, actually signaled a probable continuation of its counter attack to move higher.
For the immediate short term, the FBM KLCI is likely to remain range-bound with its immediate overhead resistance zone remained at 1490 to 1500, with 1500 being the key resistance level, while the immediate support zone is at 1476 to 1470 provided by the 20 and 30-day MAs. The longer term uptrend remained intact.
With the overall volume maintaining above the 1 billion shares level, the market is expected to remain buoyant with rotational play continued to remain active. Overnight, the Dow rebounded strongly by +129.35 points or +1.18% higher to close at 11,107.97. Today, the FBM KLCI is likely to trade within a range of 1465 to 1503.
This week's expected range: 1461 – 1524
Today’s expected range: 1465 – 1503
Resistance: 1493, 1498, 1503
Support: 1465, 1471, 1478
Stock to watch: MUHIBAH
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