Stocks on Bursa Malaysia closed lower across the board yesterday after a wave of selling as political unrest in the Middle East and North Africa continued to weigh down investor mood. The turmoil in the Middle East sent oil prices soaring with Brent crude rising as much as 2.7% to US$108.1 per barrel earlier yesterday because of fears of supply disruptions. The FBM KLCI dropped 12.22 points or 0.80% to 1,513.63. Decliners thumped advancers by 915 to 83 while 151 were unchanged. Volume decreased to 1.655 billion shares worth RM1.875 billion from Monday’s 1.842 billion shares worth RM2.064 billion.
The FBM KLCI opened with a down gap of 7.08 points at 1,518.77 and traded lower to hit the intra-day low of 1,510.18 at late morning. Bargain-hunting activities on selected blue-chips helped lift the key index to close off low at 1,513.63. Chart-wise, the FBM KLCI formed a black hammer-like candlestick with short lower shadow, which indicates sellers were dominant, and the big down gap indicated that the market was sold down on fear. The FBM KLCI is now closing right below the neckline of the head-and-shoulder pattern, and hence may continue to slide lower with the help of fear factor.
MACD has turned flat, indicating the upward momentum was taking a pause after rising for a few days. RSI (14) is at 44.4, and has again hooked downward, reflecting the pulled back of the key index to the mildly bearish zone. Stochastic, however, continued to climb higher to 53, but is tapering off, which indicates a slow down in the short term up cycle. Readings from the indicators showed that the FBM KLCI is still weak and have not shrugged off the short term bearishness.
The short term trend of the FBM KLCI remained range-bound but now with a downward bias. The medium term trend has turned sideways, while the long term uptrend remained intact. Immediate overhead resistance zone is at 1528 to 1545, while the downside support zone is at 1500 to 1490.
Overnight, the Dow fell -178.46 points or -1.44% to close at 12,212.79. Today, the FBM KLCI is likely to trade within a range of 1496 to 1528.
This week's expected range: 1474 – 1550
Today’s expected range: 1496 – 1528
Resistance: 1518, 1523, 1528
Support: 1496, 1505, 1509
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