Stocks on Bursa Malaysia closed lower yesterday as sentiment remained cautious with investors tracking weaknesses in external markets. Sentiment stayed bearish in view of overnight losses on Wall Street, weak US economic data and concerns over the slow global economic growth. The FBM KLCI lost 7.25 points or 0.47% to end at 1,521.18 after opening 2.80 points lower at 1,525.63. Losers led gainers by 354 to 351 while 328 counters were unchanged. Turnover was lower at 859.199 million shares, worth RM1.268 billion, from Wednesday’s 1.202 billion shares, worth RM1.510 billion.
The FBM KLCI opened 2.8 points lower at 1,525.63 and plunged to the intra-day low of 1,520.18 within the first fifteen minutes. The key index rebounded and climbed gradually to touch the intra-day high of 1,526.18 at noon, but profit-taking which appeared in the afternoon sent the key index to close near the low of the day at 1,521.18. Chart-wise, the FBM KLCI formed a black candlestick which sellers were dominant for the day, and the key index is likely to slide further southward. Critical support is at 1,519 provided by the 60-day moving average (MA) and the pivot low of 1,514.94 registered on 19th April. A close below the 1,514 pivot low is likely to see the FBM KLCI sliding further down to test the psychological support of 1,500.
MACD continued to slide lower, indicating a continued loss of market momentum. It is staying just above the zero-line now, and a cross below the zero-line would indicate the FBM KLCI turning bearish for the medium term. RSI (14) continued to slide lower to 44.6, indicating the key index had moved into the mildly bearish zone. Stochastic has turned downward to 47.2 from 65.1 a day ago, indicating the beginning of the index’s short term down cycle. Readings from the indicators showed that the FBM KLCI is turning bearish for the short term, and hence is likely to extend its consolidation.
The short term trend of the FBM KLCI has turned downward as it is now closing below all the short term MAs. The medium term trend remained sideways, while the long term trend is still up. Immediate downside support zone is at 1,519 to 1,515, while the overhead resistance zone is at 1,526 to 1,541. With the dwindling volume, the overall market is likely to stay in cautious trading mode.
Overnight, the Dow fell another -139.41 point or -1.10% to close at 12,584.17. Today, the FBM KLCI is likely to trade within a range of 1,512 to 1,532.
This week's expected range: 1503 – 1561
Today’s expected range: 1512 – 1532
Resistance: 1525, 1529, 1532
Support: 1512, 1516, 1518
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