Stocks on Bursa Malaysia ended last week on an easier note on continuous sell-off, especially in finance and plantation counters on a holiday-hit trading day. The local bourse extended its downtrend, shadowing the easier sentiments in Asian bourses as major markets are closed for Good Friday celebrations, while investors remained sidelined amid absence of fresh leads and continued concerns on rising inflation in the region. The FBM KLCI fell 3.58 points or 0.23% to 1,522.75, after opening 0.80 point higher at 1,556.28. Week-on-week, the key index rose by 0.81 points or 0.1% from 1,521.94 the previous Friday. Losers led gainers by 349 to 364 while 329 counters were unchanged. Turnover declined to 1.157 billion shares valued at RM1.173 billion from 1.373 billion shares valued at RM1.536 billion on Thursday, while weekly volume increased to 5.873 billion shares worth RM7.408 billion from 5.613 billion shares valued at RM8.476 billion, the previous week.
The FBM KLCI was basically in consolidation mode last week. In response to the results of the Sarawak state election on the previous Saturday, the key index started the week on a positive note, it hit the intra-day high of 1,533.18 before pulling back on profit-taking to close 5.98 points higher at 1,527.92 on Monday. Taking cue from the heavy loss on Wall Street overnight, the FBM KLCI opened on Tuesday with a big down gap of 7.71 points at 1,520.21 and plunged to the intra-week low of 1,514.94 before rebounding to close at 1,521.53. The FBM KLCI rebounded strongly on Wednesday to close at the day’s high of 1,531.02. On Thursday, the FBM KLCI hit the intra-week high of 1,535.09 before profit-taking activities send the key index down into the negative territory and ended at the day’s low of 1,526.33. And on Friday, the benchmark index extended its loss to close the week at 1,522.75.
On the weekly chart, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction and consolidation. It rebounded off the 30-week moving average (MA) after hitting it on Tuesday. It is now closing below the 5-week MA but is above the 10 and 30-week MAs, indicating a range-bound situation. In order to continue with the uptrend, the FBM KLCI will have to close above the 1,535 level in the coming week. On the other hand, if the benchmark index breaks below the 30-week support at 1,514, it is likely to slide lower to re-test the critical lower support zone of 1,500 to 1,474.
On the daily chart, the FBM KLCI formed a bearish black Marubozu candlestick last Friday, which indicates sellers were dominant on that day, and the key index is likely to move lower to re-test the immediate support zone of 1,521 to 1,514.
Both weekly and daily MACD continued to slide lower, indicating a continuous loss of market momentum. Weekly RSI (14) is flat at 54.2 indicating the weekly market strength is in the neutral zone, while the daily RSI (14) slid lower to 46.8, indicating a loss in daily market strength and the key index is turning mildly bearish. Weekly stochastic has hooked downward and crossed below its weekly slow stochastic line, issuing a bearish signal which indicates a change in the weekly cycle from up to down. On the contrary, daily stochastic has just crossed above its daily slow stochastic line, indicating a possible beginning of the up cycle. Readings from the indicators showed a relatively weak technical condition of the FBM KLCI, and hence, the benchmark index is likely to continue to consolidate with a downward bias in the coming week.
The short term trend of the FBM KLCI has turned sideways or range-bound. The medium term trend as indicated by the 60-day MA which is flat is also in the sideways. Nevertheless, the long term uptrend is still intact. Immediate overhead resistance zone is at 1,528 to 1,541, while the immediate downside support zone is at 1,521 to 1,514. A break below the critical 1,514 level is likely to see the FBM KLCI sliding further southward to test the psychological support of 1,500.
Wall Street was closed last Friday for Good Friday celebration. This week, the FBM KLCI is likely to be range-bound within a range of 1,493 to 1,556, and for today it is likely to trade within a range of 1,514 to 1,533.
This week's expected range: 1493 – 1556
Today’s expected range: 1514 – 1533
Resistance: 1526, 1529, 1533
Support: 1514, 1519, 1521
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