Stocks on Bursa Malaysia finished on easier note yesterday in line with the weak regional stock markets, which were hurt by the heightened tensions in the Korean peninsula and concerns over access to funds in China. The FBM KLCI slipped 4.0 points or 0.27% to close at 1495.88, after opening 0.42 point lower at 1499.46. Decliners outpaced advancers by 503 to 251 while 278 counters were unchanged. Total volume fell to 1.05 billion shares valued at RM1.59 billion from 1.14 billion shares valued at RM1.81 billion last Friday.
The FBM KLCI opened 0.42 points lower at 1499.46, and rebounded to the intra-day high of 1500.07 briefly, and moved lower throughout the day with intermittent rebound. It touched the intra-day low of 1493.22 before rebounding to close off low at 1495.88. Chart-wise, the FBM KLCI formed a small black hammer-like candlestick, which indicates the bears were trying to sell down but the bulls were picking up stocks at lower level, and managed to lift the key index off low. The FBM KLCI had managed to close above its immediate support at 1495 after breaking it on intra-day basis, and also rebounding off the 60-day moving average (MA) after hitting it. The key index is at a critical level at this moment, if it closes below the 60-day MA, one can expect it to slip down further to retest the support at 1488 and 1474.
MACD continued to slide lower with its histogram growing longer, this indicates the downward momentum is picking up in strength. RSI (14) slid lower to 46.7, is moving towards the weakly bearish zone. The continued lower value of RSI also indicates the bear is gradually gaining strength. Stochastic at 47.2 had continued to slide lower and moved below the 50 level, this indicates the down cycle is still in force, and the key index is expected to continue with its consolidation.
For the short term, the FBM KLCI is in a sideways trend. The medium term uptrend is at test now, as the key index is already below the 50-day MA but just holding right above the 60-day MA. If the key closes below the 60-day MA which is currently at 1493.71, it is likely that it will slide down further to re-test the support at 1474, which is a critical level to watch. The long term trend, nonetheless, remained up.
Overnight, the Dow fell -13.78 points or -0.12% lower to close at 11,478.13. Today the FBM KLCI is likely to trade within a range of 1485 to 1507.
This week's expected range: 1469 – 1539
Today’s expected range: 1485 – 1507
Resistance: 1500, 1503, 1507
Support: 1485, 1489, 1493
Stocks to watch: DRBHCOM, YTLLAND
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