Stocks on Bursa Malaysia ended on a weak note yesterday as most blue-chip counters struggled to find a footing amid volatile trade, on concerns over the Euro-zone debt crisis. Last Friday, the Fitch Ratings cut the debt ratings of Greece’s by three notches, while Standard & Poor’s slashed its outlook for Italy to “negative” from “stable”. The FBM KLCI finished 12.05 points or 0.78% lower at 1,528.98, after opening 0.24 points higher at 1,541.27. Decliners outpaced advancers by 630 to 175 while 266 counters were unchanged. Turnover was slightly higher at 870.618 million shares worth RM1.3 billion, from the 869.297 million shares valued at RM1.4 billion, recorded last Friday.
The FBM KLCI opened 0.24 point higher at 1,541.27 and surged to the intra-day high of 1,542.80 within the first fifteen minutes, but heavy selling pressure which surfaced sent the benchmark index lower to hit the intra-day low of 1,528.06 before rebounding slightly to close off low at 1,528.98. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates sellers were dominant for the day, and the key index is likely to continue moving lower today. With the price action yesterday, the key index had closed below all its short term moving averages (MA) and fallen back to the consolidation zone. The support level at 1,523 provided by the 60 and 120-day MAs and the support at 1,515 are critical levels to watch. If the FBM KLCI breaks below these levels, it is likely to move lower to test the psychological support at 1,500.
MACD has turned southward, indicating a change in the direction of the market momentum from up to down. Nonetheless, it is still above its signal line, and the current weakness could mean just a pull back correction. RSI (14) has dropped rapidly to 48.2 from 56.7, sending the key index to the bearish bias neutral zone. Stochastic has crossed below its slow stochastic line and is at 70.7, indicating the beginning of a short term down cycle. Readings from the indicators showed that the FBM KLCI is turning bearish, and the consolidation process may prolong.
As the FBM KLCI had closed below all the short term MAs, the short term trend has turned southward. The medium term trend is still sideways, while the long term trend is still up. The long term 200-day MA is currently at 1,494. Immediate downside support zone is at 1,523 to 1,515, while the overhead resistance zone is at 1,535 to 1,541.
Overnight, the Dow fell -130.78 points or -1.05% to close at 12,381.26. Today, the FBM KLCI is likely to trade within a range of 1,508 to 1,558.
This week's expected range: 1520 – 1565
Today’s expected range: 1531 – 1555
Resistance: 1538, 1548, 1558
Support: 1508, 1518, 1523
No comments:
Post a Comment