Stocks on Bursa Malaysia ended broadly lower yesterday with the benchmark index down by almost one per cent as investors locked in profits with losses led mainly by finance stocks. The FBM KLCI declined by 14.31 points or 0.937 % to close at the lowest level of the day at 1513.70, after opening 1.39 points lower at 1526.62. Decliners led advancers by 447 to 381 while 287 counters were unchanged. Total turnover dropped to 1.576 billion shares worth RM2.279 billion from Wednesday’s 1.741 billion shares worth RM2.274 billion.
The FBM KLCI opened 1.39 points lower at 1526.62 and traded lower throughout the day with intermittent weak rebound. The key index ended the day at its lowest point at 1513.70 on heavy selling pressure. Chart-wise, the FBM KLCI formed a bearish Marubozu candlestick which indicates sellers were in total control of the day. In fact, the appearance of this candlestick pattern is a confirmation of the top reversal signal issued by the spinning-top candlestick which formed on the day before. The key index is expected to correct downward further, and is viewed as a healthy correction to the one month long bulls run which had not have a proper correction.
MACD has turned downward, reflecting the current correction of the key index, nonetheless, it is still above its signal line and its underlying momentum is still positive. RSI (14) dropped rapidly from the overbought zone at 79.3 to 63.2 in the neutral zone. Stochastic at 83.5 has crossed below its slow stochastic, but is still above its 80 mark, hence, is considered a pullback; the up cycle would turn into down cycle when the stochastic crosses below the 80 mark. However, could this be the beginning of a major correction? The market will unfold itself.
With the FBM KLCI closing below the short term 5-day moving average (MA) yesterday, the short term trend is likely to turn southward. Nevertheless, the underlying medium to longer term uptrend still remained intact at the moment. The key index is expected to correct downward to the 1494 support level, provided by the 30-day MA. Immediate support zone is at 1512 to 1494 with 1500 being the key support level, while the overhead resistance zone is at 1527 to 1532.
Overnight, the Dow fell -73.94 points or -0.65% lower to close at 11,283.10. Today, the FBM KLCI is likely to trade within a range of 1495 to 1532.
This week's expected range: 1492 – 1540
Today’s expected range: 1495 – 1532
Resistance: 1523, 1527, 1532
Support: 1495, 1504, 1509
No comments:
Post a Comment