Stocks on Bursa Malaysia closed lower yesterday on selling pressure in line with losses in regional bourses. However, continued buying interest in heavyweights like CIMB, MAYBANK, RHBCAP and AMMB as well as in low-priced counters helped narrow overall losses. The FBM KLCI fell 1.48 points or 0.1% to close at 1509.12, after opening 0.89 of a point better at 1,511.47. Market breadth was negative with losers led gainers by 439 to 330 while 287 counters were unchanged. Turnover stood at 1.119 billion shares worth RM1.764 billion compared with Tuesday’s 1.173 billion shares valued at RM1.677 billion.
The FBM KLCI opened 0.89 point higher and surged to the intra-day high of 1514.24 within the first ten minutes. Profit-taking activities sent the key index lower throughout the day, with intermittent rebound, to the intra-day of 1504.75 before last minute buying of selected heavyweights lift the key index off low to close at 1509.12. Chart-wise, the FBM KLCI formed a black spinning-top candlestick with a longer lower shadow, which indicates indecision of market direction. The formation of three spinning-top candlesticks over the last three days indicates the market was in a sideways consolidation mode.
MACD was flat, but its histograms continued to turn shorter, indicating a continuous loss in momentum. RSI (14) dropped slightly to 54.9 from 55.9 a day earlier, is still in the neutral zone. Stochastic, however, hooked up slightly but still below its slow stochastic line. Readings from the indicators indicate the FBM KLCI lacks momentum at the moment, and is likely to consolidate further.
The FBM KLCI is now closing below its 5-day moving average (MA), but is above the 10 and 30-day MAs, indicating sideways for the short term. The longer term uptrend remained intact. Immediate overhead resistance zone is at 1515 to 1523 while the immediate support zone is at 1504 to 1500.
The FBM KLCI is likely to remain sideways, while the overall market is expected to remain active with rotational play in second and third liners. Overnight, the Dow fell -19.07 points or -0.17% lower to close at 11,457.47. Today, the FBM KLCI is likely to trade within a range of 1495 to 1524.
This week's expected range: 1470 – 1548
Today’s expected range: 1495 – 1524
Resistance: 1514, 1519, 1524
Support: 1495, 1499, 1504
Stocks to watch: OSK, KNM, YEELEE
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