Stocks on Bursa Malaysia closed lower yesterday on profit-taking activities as investors were reluctant to keep heavy positions ahead of Christmas holiday. Gains in some selected heavyweights managed to keep the FBM KLCI above 1,500 level. The benchmark FBM KLCI edged down by 0.57 of a point or 0.04% to 1514.48, after opening 3.64 points higher at 1518.69. Losers led gainers by 383 to 356, while 305 counters were unchanged. Total volume declined to 1.251 billion shares valued at RM1.646 billion from 1.253 billion shares worth RM1.664 billion on Wednesday.
The FBM KLCI opened 3.64 points higher at 1518.69 and touched the intra-day high of 1518.80 briefly after opening, profit-taking activities immediately set in and sent the key index to the intra-day low of 1511.20. The key index was in a sideways range before late buying in selected heavyweights lifted it to close almost unchanged at 1514.48. Chart-wise, the FBM KLCI formed a dark-cloud cover candlestick pattern, which indicates heavy profit-taking activities by the bears when the key index came near the resistance zone. With this candle pattern formation, the key index is expected to continue its consolidation today.
MACD continued to move higher after making a golden-cross, indicating the gradual pick up in momentum. RSI (14) at 57.4 has hooked down slightly reflecting the marginal loss in the key index. Stochastic at 67.6 has continued to climb higher, indicating a continuation of the short term up cycle. Signals from the indicators indicates that the short term momentum of the FBM KLCI has turned positive but still lack of strength.
The FBM KLCI is now closing above all its moving averages (MA), which indicates the key index is back to the bullish mode. However, its immediate short term 5-day MA is still below the 10-day MA, hence, the short term trend is still sideways. The medium to long term trend, nonetheless, remained up. Immediate overhead resistance zone is at 1518 to 1523, while the immediate downside support zone is at 1510 to 1500.
The FBM KLCI is expected to remain in consolidation mood today, on the Christmas Eve, but the second and third liners are likely to be active in rotational play mode. Overnight, the Dow rose +14.00 points or +0.12% higher to close at 11,573.49. Today the FBM KLCI is likely to trade within a range of 1503 to 1526.
This week's expected range: 1469 – 1539
Today’s expected range: 1503 – 1526
Resistance: 1518, 1522, 1526
Support: 1503, 1507, 1510
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