Stocks on Bursa Malaysia closed easier yesterday in line with losses in regional markets. Most Asian stock markets fell amid a fresh round of concerns over China's economic growth and possible new measures to cool housing prices. Concerns over the pace of recovery in the US economy with the end of the Federal Reserve's bond-buying programme this month and escalating debt woes in Greece put further pressure on the market The FBM KLCI ended at 1,559.19, down 4.24 points or 0.27%, after opening 1.44 points lower at 1,561.99. Decliners led advancers by 484 to 290, while 304 counters were unchanged. Volume was lower at 849.81 million shares worth RM1.40 billion compared with 946.22 million valued at RM2.22 billion last Friday.
The FBM KLCI opened 1.44 points lower at 1,561.99 but rebounded to the intra-day high of 1,563.66 within the first thirty minutes. Profit-taking activities which appeared pushed the key index to hit the intra-day low of 1,557.52 before last minute bargain hunting on selected blue-chips pushed the key index to close off low at 1,559.19. Chart-wise, the FBM KLCI formed a black spinning-top in bearish Harami position which indicates indecision of market direction with a downward bias. The key index has continued to close above the downtrend channel as well as all the moving averages, indicating a bullish state of the index. However, the strong resistance at 1,566 continued to impose pressure on the key index.
MACD moved higher but marginally after making the golden-cross on last Friday, indicating a lack of momentum in the FBM KLCI. RSI (14) fell to 58.3, indicating the key index’s relative strength is reduced to mildly bullish from bullish on last Friday. Stochastic is higher at 71.8, indicating the short term up cycle is still intact. Signals from the indicators showed that the upward momentum of the FBM KLCI is reducing, but has not turn bearish yet.
The short term trend of the FBM KLCI is up, the medium term trend, as indicated by the 60-day moving average is also starting to climb upward, and the long term uptrend is intact. The FBM KLCI is in an uptrend state, however, it still lacks momentum, perhaps some catalysts is needed for it to push through the overhead resistance zone at 1,566 to 1,577. Immediate downside support zone is at 1,556 to 1,545.
Overnight, the Dow rose +76.02 points or +0.63% to close at 12,080.38. Today, the FBM KLCI is likely to trade within a range of 1,550 to 1,570.
This week's expected range: 1529 – 1585
Today’s expected range: 1550 – 1570
Resistance: 1563, 1566, 1570
Support: 1550, 1553, 1556
Stocks to watch: LBS, GLOMAC, CUSCAPI
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