Stocks on Bursa Malaysia closed mostly lower yesterday as investors were cautious ahead of the third quarter gross domestic product (GDP) data as economists expected a slower growth. The FBM KLCI was 2.85 points or 0.19% lower at 1503.20 after opening 0.67 points higher at 1506.72. Decliners outnumbered advancers by 398 to 350 while 289 counters were unchanged. Turnover dwindled to 968 million shares worth RM1.165 billion from 1.024 billion shares worth RM1.436 last Friday.
The FBM KLCI opened 0.67 of a point higher at 1506.72 and surged to the intra-day high of 1510.13 within the first thirties minutes. Thereafter, profit taking activities emerged and sent the key index gradually southward to the intra-day low of 1502.82 with intermittent rebound, and finally settled off low at 1503.20. Chart-wise, the price action of the key index formed a dark-cloud-cover candlestick pattern which is a reversal pattern. The formation of this indicates players were quick to lock-in profits on rebound, hence, sent the key index back into its consolidation range. Immediate strong resistance is seen at the 1510 level.
MACD continued to slide lower, but at a slower pace, as shown by the shorter histogram. This indicates the downward momentum is waning gradually but has not turn upward yet. RSI (14) at 53.4 has hooked downward, moving back into the neutral zone. Stochastic at 32.9 is almost flat, and continued to stay below its slow stochastic line, signifying the reversal strength is still relatively weak. Readings from the indicators indicates the FBM KLCI might continue to move sideways.
The FBM KLCI is now bound between the 10-day moving average (MA) on top and the 30-day MA below, they formed the immediate resistance at 1508 and support at 1500. A breakout in either direction would see the key index continue moving in the breakout direction. The underlying medium to longer term uptrend remained intact. Immediate overhead resistance zone is at 1510 to 1532 while the downside support zone is at 1500 to 1487.
Overnight, the Dow fell -24.97 points or -0.22% lower to close at 11,178.58. Today, the FBM KLCI is likely to trade within a range of 1493 to 1517.
This week's expected range: 1470 – 1525
Today’s expected range: 1493 – 1517
Resistance: 1508, 1513, 1517
Support: 1493, 1498, 1500
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