Stocks on Bursa Malaysia finished lower yesterday, bucking regional trend, led by finance stocks and on selling pressure as global economic growth outlook dampened investor sentiment. Finance stocks came under selling pressure due to the global economic headwinds and their potential negative impact on the asset quality. The local market was in consolidation mode despite steadier regional markets in line with Wall Street’s gain overnight. The FBM KLCI fell 4.41 points, or 0.3%, to 1,464.74. Losers overwhelmed gainers by 429 to 240 while 311 counters closed unchanged. Volume fell to 833.92 million shares worth RM2.022 billion from Wednesday’s 892.352 million shares worth RM1.857 billion.
The FBM KLCI opened 1.22 points higher at 1,470.37 and touched the intra-day high of 1,471.03 within the first five minutes after opening. Selling pressure emerged and pressed the key index lower to hit intra-day low of 1,460.96 before rebounding to close off low at 1,464.74. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates the bears continued to dominate the day. The key index had pierced through the 23% Fibonacci retracement support level at 1,464 but managed to climb back above the level. However, in view of the continued selling pressure ahead of the long holiday next week, the FBM KLCI is likely to slip further downward to test the support zone of 1,459 to 1,450. A break below the psychological support level at 1,450 will likely see the key index falling lower to re-test the 1,423-point support level.
MACD continued to slide lower, indicating a continued increased of the bearish downward momentum. RSI (14) slid lower to 30.2, indicating a continued weakening of the relative strength, and the key index is moving into the very bearish zone. Stochastic has however, hooked up to 44.5, giving out an opposite signal. Readings from the indicators showed that the FBM KLCI is currently very weak and bearish, and is likely to further consolidate.
The trend of the FBM KLCI remained down and bearish. Immediate critical support is at 1,459 provided by the 360-day moving average follow by the psychological support level of 1,450-point level. If these levels could not hold, then the FBM KLCI would turned long term bearish and there will be more downside to come, and possible targets are the 23.6% Fibonacci retracement level at 1,410, follow by the 38.2% Fibonacci retracement level at 1,293, measuring from the pivot low of 801 to the pivot high of 1,597.
Overnight, the Dow fell -170.89 points or -1.51% to close at 11,149.82. Today, the FBM KLCI is likely to trade within a range of 1,450 to 1,481.
This week's expected range: 1438 – 1524
Today’s expected range: 1450 – 1481
Resistance: 1470, 1476, 1481
Support: 1450, 1455, 1460
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