Stocks on Bursa Malaysia ended easier yesterday with most indices slipping into negative territory in line with other regional markets. Investors were cautious as regional stock markets fell after surprisingly weak Chinese trade data hit them. The FBM KLCI fell 6.78 points or 0.45% to 1,516.91 after opening 0.84 point lower at 1,522.85. Losers led gainers by 483 to 253 while 280 counters were unchanged. Turnover decreased to 1.09 billion shares worth RM1.56 billion from 1.50 billion shares worth RM2.24 billion on Wednesday.
The FBM KLCI opened 0.84 point lower at 1,522.85 and rebounded to the intra-day high of 1,524.12 within the first five minute, and heavy profit-taking activities which surfaced pressed the key index lower to touch the intra-day low of 1,515.32 before some late buying of selected blue-chips lifted it to close off low at 1,516.91. Chart-wise, the FBM KLCI formed a bearish black candlestick which marked a reversal after the rebound on Wednesday, and the key index has again fallen below the neckline of the head-and-shoulder pattern. Moreover, the key index has also closed below the 5-day moving average as of yesterday. Hence, it is likely to further correct downward or consolidate.
MACD has continued to move higher, but its histogram has turned shorter, indicating a slow down in the short term upward momentum and a possible reversal ahead. As the MACD is still below the zero-line, the recent up move of the FBM KLCI could well be just part of a technical rebound, and may continue its downtrend if the up move could not be sustained. RSI (14) has again hooked downward to 50.5, back to the neutral zone. Stochastic is marginally higher at 81.8, and is turning flat, marking a possible turn of the short term up cycle. Readings from the indicators showed that the FBM KLCI is technically still weak, the short term uptrend may not be able to sustain, and hence may reverse downward.
The short term trend of the FBM KLCI has now turned sideways with a downward bias, the medium term trend is sideways while the long term trend is still up. Immediate overhead resistance zone is at 1,524 to 1,530, while the downside support zone is at 1,510 to 1,500.
Overnight, the Dow fell -228.48 points or -1.87% to close at 11,984.61. Today, the FBM KLCI is likely to trade within a range of 1,501 to 1,528.
This week's expected range: 1453 – 1584
Today’s expected range: 1501 – 1528
Resistance: 1519, 1522, 1528
Support: 1501, 1509, 1513
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