Stocks on Bursa Malaysia closed lower yesterday on selling pressure in selected key heavyweights, and the benchmark fell in line with bearish sentiments across regional markets on talks China would raise interest rates. The FBM KLCI fell by 10.72 points or 0.72% to close at 1485.23, after opening 1.17 points lower at 1494.78. Decliners outpaced advancers by 465 to 299 while 259 counters were unchanged. Turnover declined to 1.015 billion shares valued at RM2.055 billion from Monday’s 1.049 billion shares valued at RM1.929 billion.
The FBM KLCI opened 1.17 points lower but traded to the intra-day high of 1497.50 within the first fifteen minutes, and selling pressure surfaced which pushed the key index lower throughout the day with intermittent rebound. The key index finally succumbed to heavy selling pressure to close at the low of the day. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates the bear was in control throughout the day. Following this price action, the key index is expected to continue sliding lower today to re-test the recent support at 1474. If this level could not hold, there is a strong likelihood that the key index might slip further downward to the next support at 1465.
MACD continued to slide lower and is approaching the zero line, indicating the momentum is turning bearish, a cross below the zero line would confirmed the beginning of the medium term bearish trend. RSI (14) at 43.3 has again hooked down, which indicates the market strength is moving into the bearish zone. Stochastic has again turned downward and crossed its slow stochastic line, indicating the resumption of the downward move. Signals from the indicators are indicating a bearish short term outlook for the FBM KLCI, and hence the key index might continue its southward journey.
The short term trend of the FBM KLCI is down while its medium to long term trend is still up. However, if the medium term trend is under challenge now with the 60-day moving average support being tested soon, if the key index could not hold above the 60-day MA, there would be more downside to come. Immediate support zone for the FBM KLCI is at 1474 to 1457 while the strong overhead resistance is at 1500.
Overnight, the Dow fell -46.47 points or -0.42% lower to close at 11,006.02. Today, the FBM KLCI is likely to trade within a range of 1465 to 1509.
This week's expected range: 1442 – 1526
Today’s expected range: 1465 – 1509
Resistance: 1493, 1501, 1509
Support: 1465, 1477, 1481
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