Stocks on Bursa Malaysia ended lower yesterday following the path of key Asian peers. Trading in key Asian markets was lackluster mainly due to renewed fears over the slow progress in Japan’s tsunami hit nuclear plant. The FBM KLCI finished at 1,514.25, down 1.3 points or 0.09%, after opening 1.05 points lower at 1,514.5. Losers led gainers by 379 to 371 while 305 counters were unchanged. Turnover rose to 1.280 billion shares, worth RM1.613 billion, from 1.16 billion shares, worth RM1.73 billion, transacted last Friday.
The FBM KLCI opened with a down gap of 1.05 points at 1,514.50 but rebounded to the intra-day high of 1,517.47 within the first hour of trade. Profit-taking activities which appeared sent the key index to the intra-day low of 1,511.98 near lunch break, and it rebounded in the afternoon to close off low at 1,514.50. Chart-wise, the FBM KLCI formed another Doji candlestick which indicates indecision of the market direction. However, as the FBM KLCI had closed lower, this showed that the key index is taking a pause to consolidate itself after rising consecutively for six days.
MACD continued to climb higher, but on a reduced pace, as shown by the histogram that is rounding off. This indicates the upward momentum is slowing down. RSI (14) is at 53 and has hooked downward, reflecting the mild correction of the key index. Stochastic is higher at 77.5, which indicates a continuation of the short term up cycle. Readings from the indicators showed that the upward momentum of FBM KLCI is slowing down and may consolidate itself after the recent run-up.
Short term trend of the FBM KLCI remained up, while the medium term trend is sideways, and the long term uptrend remained intact. Immediate overhead resistance zone is at 1,519 to 1,530, while the downside support zone is at 1,505 to 1,490. The overall market is likely to be mixed with the second and third liners remain active while the blue-chip stocks goes into consolidation.
Overnight, the Dow fell -22.71 points or -0.19% to close at 12,197.88. Today, the FBM KLCI is likely to trade within a range of 1,506 to 1,523.
This week's expected range: 1483 – 1539
Today’s expected range: 1506 – 1523
Resistance: 1517, 1520, 1523
Support: 1506, 1509, 1511
Stocks to watch: DIGISTA, PWORTH, MIECO,WTK, LINGUI, SUBUR, JTIASA, TAANN
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