Stocks on Bursa Malaysia ended lower last Friday as investors moved to lock in profits in line with the regional trend. The FBM KLCI closed 14.01 points or 0.92% down at 1507.28 as only four of the 30 stocks in the index were in positive territory. Week-on-week, the key market barometer was up 6.30 points from 1500.98 the previous Friday. Weekly volume rose to 4.968 billion shares valued at RM8.94 billion from 4.89 billion shares valued at RM9 billion the previous week.
The FBM KLCI opened with an up gap of 4.68 points at 1505.66 on Monday but traded lower throughout the day to touch the intra-week low of 1497.61 before rebounded to close at 1501.74 on last minute buying in selected heavyweights. Bursa Malaysia was closed for Awal Muharram holiday on Tuesday. On Wednesday, the key index gained 8.32 points to 1510.06, after opening 2.78 points higher at 1504.52 with continued buying in CIMB and TENAGA which lifted the key market barometer despite a mixed regional market performance. The FBM KLCI gained 11.23 points or 0.74% to 1521.29 on Thursday led by CIMB and PCHEM spurred by positive sentiment in regional markets as well as the country's manufacturing sales figures. And on Friday, the FBM KLCI were mostly in a profit-taking mode throughout the day with investors moved to lock in profits ahead of the weekend to close 14.01 points lower at 1507.28.
On the weekly chart, the FBM KLCI formed a white spinning-top candlestick with a long upper shadow which indicates heavy profit-taking activities when the key index approached the historical high level. Nonetheless, it is still in the bullish territory as it breakout from its recent consolidation to close above the 5 and 10-week moving averages (MA). On the daily chart, the key index formed a bearish engulfing candlestick which indicates heavy sell down on last Friday, but is resting right on the 5-day MA. The key index is expected to receive strong support at the 1500 to 1503 levels provided by the 10 and 30-day MAs.
Weekly MACD continued to slide lower after making a dead-cross the week before, indicates the continued loss in the medium term upward momentum and moving into a correction mode. The daily MACD however, painted a different picture, where it continued to move higher after making a golden-cross, but is now tapering off as shown by the shorter histogram, indicating a loss in the daily upward momentum.
Weekly RSI (14) at 72.9 has continued to move higher from 71.8 the previous week, and is still in the very bullish zone. Daily RSI (14) has however plunged to 54.2 from 63.5, and is back to the neutral zone.
Weekly Stochastic at 73.3 has continued to move lower indicating the continued loss in weekly market strength and the weekly down cycle is not really over yet. Daily Stochastic is at 86, and has hooked downward reflecting the profit-taking day on last Friday. Conflicting signals from the weekly and daily indicators indicates that the FBM KLCI might continue to move sideways.
The underlying medium to long term uptrend of the FBM KLCI remained intact. However, the short term trend is more of a sideways as the 10 and 20-day MAs is still below the 30-day MA. Immediate overhead resistance zone is at 1513 to 1532 while the downside support zone lies at 1500 to 1490.
For the coming week, in view of the absence of any announcement on key economic data locally, the market is expected to look to external developments for direction, and is expected to remain range-bound. The Dow rose +40.26 points or +0.35% higher to close at 11,410.32 last Friday. This week, the FBM KLCI may trade within a range of 1470 to 1548, and for today it is likely to trade within a range of 1486 to 1528.
This week's expected range: 1470 – 1548
Today’s expected range: 1486 – 1528
Resistance: 1513, 1518, 1528
Support: 1486, 1496, 1502
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