Stocks on Bursa Malaysia ended lower yesterday as profit-taking emerged as global markets slipped further amidst concerns over the Middle East turmoil. The key index managed to pare down some of its losses in the morning session but the broader market remained weak amid a continuous sell-off in key heavyweights. The FBM KLCI closed at 1,499.28, down 0.2% or 2.96 points after opening 8.64 points easier at 1,493.60. Decliners outnumbered advancers by 796 to 117 and 198 counters ended flat. Trading volume increased to 1.36 billion shares, worth RM1.72 billion, from Tuesday’s 1.12 billion shares valued at RM1.51 billion.
Taking cue from the hefty fall on Wall Street overnight, the FBM KLCI opened with a down gap of 8.64 points at 1,493.60 and plunged to the intra-day low of 1,488.95 within the first thirty minutes. The key index then rebounded on bargain-hunting to 1,496 level and was hovering there for major part of the day, some last minute buying in selected blue-chips helped push the key index to end at the day’s high. Chart-wise, the FBM KLCI formed a white piercing-line candlestick which indicates buying support for index-linked counters. The key index, however, is still closing below the psychological level of 1,500 and the long term 120-day moving average, which is bearish. The key index will have to move above the 1,530 level in the near term in order to reverse the current down trend.
MACD continued to move higher, but is still below its signal line in the negative zone, indicating the upward momentum is still weak, and the upturn could just well be a technical rebound. RSI (14) at 41.8 has hooked downward marginally, and is still in the bearish zone. Stochastic has climbed higher to 36.5, indicating a continuation in the short term upward strength. Readings from the indicators showed that the FBM KLCI is currently still bearish, and the recent up move could well be just a technical rebound which could be short-lived, and is likely to continue to consolidate.
The current trend of the FBM KLCI remained down. The key index will have to overcome the strong immediate overhead resistance zone at 1,500 to 1,528 to reverse the downtrend. Immediate downside support zone is at 1,490 to 1,474. Judging form the dwindling volume, the overall market may continue to consolidate, and if the key index is able to stabilize above the 1,500 level, this could be a good time to accumulate quality shares for longer term gain.
Overnight, the Dow rose +8.78 points or +0.07% to close at 12,066.80. Today, the FBM KLCI is likely to trade within a range of 1,482 to 1,510.
This week's expected range: 1438 – 1540
Today’s expected range: 1482 – 1510
Resistance: 1503, 1506, 1510
Support: 1482, 1485, 1492
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