Stocks on Bursa Malaysia which started the early session lower bounced back to close on a mixed note yesterday on bargain hunting. Pleasant surprises in earnings reports by blue-chip companies overshadowed the bearish Wall Street overnight and anxiety over the political unrest in the Middle East. The FBM KLCI ended 2.52 points or 0.17% lower at 1,511.11 after opening 9.37 points lower at 1,504.26. Gainers outpaced losers by 433 to 386, while 274 counters were unchanged. Volume increased to 1.695 billion shares worth RM2.046 billion from 1.655 billion shares worth RM1.875 billion on Tuesday.
The FBM KLCI opened with a big down gap of 9.37 points at 1,504.26 and traded lower to the intra-day low of 1,502.01 within the first ten minutes. The key index rebounded on bargain-hunting of blue-chip counters which gradually pushed the key index to the intra-day high of 1,516.52 before late profit-taking activities pressed it to close off high at 1,511.11. Chart-wise, the FBM KLCI formed a white candlestick in possible star position, which reflects the bargain-hunting activities by investors on quality blue-chip stocks. The key index has again closed below the neckline of the head-and-shoulder pattern, and is technically weak.
MACD has curved slightly downward and is still below its signal line, as well as below the zero-line, indicating a bearish condition. RSI (14) slid lower to 43.3 and is in the mildly bearish zone. Stochastic at 49 has hooked downward and has come below the 50 level, indicating a pull back of the recent rebound. Readings from the indicators indicated a short term bearish outlook for the FBM KLCI which will continue until clear signs of reversal is observed.
The short term trend of the FBM KLCI is down, and the medium term trend has turned sideways, while the long term uptrend remained intact. Immediate overhead resistance is at 1,515, the neckline level, while the downside support zone is at 1500 to 1490. The 120-day moving average is currently at 1,499, and will be a critical support level.
Overnight, the Dow fell -107.01 points or -0.88% to close at 12,105.78. Today, the FBM KLCI is likely to trade within a range of 1488 to 1525.
This week's expected range: 1474 – 1550
Today’s expected range: 1488 – 1525
Resistance: 1516, 1521, 1525
Support: 1488, 1495, 1503
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