Stocks on Bursa Malaysia ended marginally lower yesterday but the undertone of the market remained firm. Although regional markets were mostly in the red, following the overnight downtrend in Wall Street, but the local bourse was still quite attractive. The FBM KLCI came off 0.1 of a point to 1,551.79, after touching a high of 1,553.83 in active trading yesterday. Gainers outpaced losers by 380 to 309 while 336 counters were unchanged. Turnover increased to 852.144 million shares, valued at RM1.636 billion, from Tuesday’s 705.809 million shares, worth RM1.339 billion.
The FBM KLCI opened 1.39 point lower at 1,550.50 and slid to the intra-day low of 1,549.89 within the first five minutes. It rebounded to hit the intra-day high of 1,553.83, and selling pressure which appeared in late afternoon push the key index to close marginally lower at 1,551.79. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick which indicates indecision of market direction. In fact, the FBM KLCI was traded in a narrow range in consolidation mode. An upside breakout above 1,554 may see it rally towards 1,560, while a downside breakout below 1,548 may see it sliding lower towards 1,540. The critical downside support is at 1,530, provided by the uptrend line.
MACD continued to slid lower, indicating a continuous loss of momentum. However, as the MACD is still above its signal line, the current state of weakness is considered as just a short term correction. RSI (14) was almost flat at 57.2, reflecting the sideways condition of the key index. Stochastic is lower at 64.6, reflecting the continued weakness of the key index. Readings from the indicators showed that the FBM KLCI is currently in a state of consolidation.
The FBM KLCI is currently sideways for the short and medium term, while the long term uptrend is still intact. Immediate overhead resistance zone is at 1,554 to 1,566 while the immediate downside support zone is at 1,548 to 1,540. With the gradual improvement in volume, the overall market is likely to gradually pick up strength while the benchmark FBM KLCI may continue to consolidate.
Overnight, the Dow fell -21.87 points or -0.18% to close at 12,048.94. Today, the FBM KLCI is likely to trade within a range of 1,544 to 1,558.
This week's expected range: 1520 – 1591
Today’s expected range: 1545 – 1558
Resistance: 1554, 1556, 1558
Support: 1545, 1547, 1549
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