Stocks on Bursa Malaysia ended lower last Friday despite the positive cues overnight from Wall Street with major US bellwethers finishing higher. The uncertainty and volatility of equities and commodities market were reflected in the performance of the local bourse. The market also moved in line with weaker performance in the regional markets. The FBM KLCI finished 2.99 points or 0.19% lower at 1,541.03, after opening 0.07 point higher at 1,544.09. Week-on-week, the benchmark index gained 0.29 point from previous Friday’s close of 1,540.74. Market breadth was negative with losers leading gainers 378 to 361 while 342 counters were unchanged. Trading was thin with turnover declined to 869.3 million shares valued at RM1.37 billion from 890.85 million shares worth RM1.48 billion on Thursday. Weekly volume decreased to 3.56 billion shares valued at RM6 billion from 4.71 billion shares valued at RM6.91 billion last week.
The FBM KLCI kicked off last week on a firmer footing to touch an intra-day high of 1,545.34 on Monday morning before succumbing to strong selling pressure which led the key index to close 4.47 points lower at 1,536.27. Bursa Malaysia was closed on Tuesday for a public holiday. The benchmark index rebounded on Wednesday to close 5.0 points better at 1,541.2 on bargain-hunting activities on selected key index-linked counters. The FBM KLCI continued to move higher on Thursday to hit the intra-week high of 1,550.62 before profit-taking activities caused a pullback to settle the day 2.75 points better at 1,544.02. And profit-taking activities continued into Friday which saw the key index closing 2.99 points lower at 1,541.03.
On the weekly chart, the FBM KLCI made a marginal gain of 0.29 point, and formed a Doji candlestick which indicates indecision of the benchmark index to move higher, or rather, one can say that the key index is met with heavy resistance or selling pressure when it approached the psychological resistance level of 1,550. With the formation of Doji candlestick this week, the FBM KLCI is likely to take a pause from its recent up move and consolidate itself. Immediate key resistance level is at 1,550.
On the daily chart, the FBM KLCI formed a black inverted hammer candlestick which served as a confirmation to the top reversal signal of the shooting-star candlestick formed on Thursday. Hence, the benchmark index is likely to further correct itself. Immediate support zone is at 1,538 to 1,532.
Weekly MACD has turned flat, but is still below its weekly signal line. However, the weekly histogram has turned shorter upward, indicating a slow down in the weekly downward momentum. Daily MACD has continued to climb higher, but its histogram has turned shorter downward, indicating a slow down in the daily upward momentum.
Weekly RSI (14) is at 56.8, has turned flat and remained in the mildly bullish zone. Daily RSI (14) has hooked downward to 56.7 and is still in the mildly bullish zone.
Weekly Stochastic continued to move higher to 64 from 61.7 the previous week. Daily Stochastic is marginally higher at 83.6, indicating the short term up cycle is still intact. Mixed signals from the indicators showed that the FBM KLCI is likely to continue with its current range-bound situation.
The short term trend of the FBM KLCI is currently up, while the medium term trend is sideways, and the long term uptrend is still intact. Immediate overhead resistance zone is at 1,550 to 1,565, while the immediate downside support zone is at 1,538 to 1,532. With the reducing volume, the overall market is likely to go into consolidation and remain range-bound.
Last Friday, the Dow fell -93.28 points or -0.74% to close at 12,512.04. This week, the FBM KLCI is likely to trade within a range of 1,520 to 1,565, and for today it is likely to trade within a range of 1,531 to 1,555.
This week's expected range: 1520 – 1565
Today’s expected range: 1531 – 1555
Resistance: 1546, 1550, 1555
Support: 1531, 1536, 1538
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