Stocks on Bursa Malaysia ended on a bearish note yesterday on profit-taking on blue-chips. The FBM KLCI slumped 13.49 points to 1,544.0, after opening 2.18 points higher at 1,559.67. Decliners led advancers by 724 to 179 while 229 counters were unchanged. Volume decreased to 1.470 billion shares valued at RM2.179 billion from 1.669 billion shares valued at RM2.119 billion last Friday.
The FBM KLCI opened 2.18 points higher at its day’s high of 1,559.67 and stayed in the positive territory for only a brief fifteen minutes. It then moved all the way south on persistent selling pressure to hit the intra-day low of 1,540.67, losing 16.82 points at its worst, before some last minute bargain-hunting activities lifted the key index to close off low at 1,544.00. Chart-wise, the FBM KLCI formed a bearish long black candlestick which confirmed the top-reversal signal issued by the dark-cloud-cover candle pattern formed last Friday. With this price action, the three weeks rally which started on the 17th March has finally came to an end, and the FBM KLCI will take a breather to consolidate itself. Hence, more downward moves are expected in the near term.
MACD has turned downward for the first time after rising continuously for the past three weeks, and its histogram turned shorter rapidly, indicating a change in the momentum direction from up to down. Nonetheless, the MACD line is still above its signal line, and hence, this could be just a short term correction. RSI (14) fell rapidly to 58.1 from 68.4, bringing the FBM KLCI into the mildly bullish zone. Stochastic is lower at 83, reflecting the correction of the key index. Nonetheless, it is still above the 80 level, and hence, the downward move could be just a temporary correction. Readings from the indicators showed that the FBM KLCI is taking a pause from its upward move, and may goes into a consolidation phase.
The FBM KLCI has closed below the 5 and 10-day moving averages (MA), and hence is likely to continue moving lower in the near term. However, it is still above its 20 and 30-day MAs which still point northeast, which may lend support to the key index when it falls. The next critical support level to watch is 1,529, if this level could not hold, then the FBM KLCI will again turn bearish. The medium term trend remained sideways, while the long term uptrend is still intact. Immediate downside support zone is now at 1,540 to 1,529 while the overhead resistance zone is at 1,550 to 1,577.
Overnight, the Dow rose a marginal +1.06 points or +0.01% to close at 12,381.11. Today, the FBM KLCI is likely to trade within a range of 1,517 to 1,579.
This week's expected range: 1534 – 1581
Today’s expected range: 1517 – 1579
Resistance: 1556, 1568, 1579
Support: 1517, 1529, 1537
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