Stocks on Bursa Malaysia closed mostly lower yesterday in line with continued weaknesses in regional markets which were spooked by concerns of a slowdown in global manufacturing activities. Trading was cautious amid the easier trend on Wall Street despite US lawmakers approving a deal to raise the country's debt limit. The FBM KLCI closed 3.16 points or 0.20% lower at 1,554.85. Losers beat gainers by 496 to 307 while 262 counters were unchanged. Turnover was lower at 903.522 million shares worth RM1.437 billion from 1.009 billion shares worth RM1.452 billion on Monday.
The FBM KLCI opened flat at 1,558.02 and slid into the negative territory before rebounding to touch the intra-day high of 1,558.84 at late morning. Profit-taking activity which appeared at noon pushed the key index to hit the intra-day low of 1,553.39 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which indicates heavy profit-taking activity after a strong rebound on Monday, and the key index is likely to continue with its consolidation process today. Immediate critical support is at 1,544-point level, a breach of this support is likely to see the FBM KLCI sliding toward the next lower support zone at 1,539 to 1,530.
MACD continued to slide lower, but the histogram turned slightly shorter upward, indicating a slow down in the downward momentum. RSI (14) hooked downward slightly to 42.8, indicating the short term relative strength of the key index is still bearish. Stochastic was marginally higher at 23.2, indicating a slight pick up in the market strength. Mixed signals from the indicators showed that the FBM KLCI is likely to continue to consolidate until clear reversal signals is established.
The short term trend of the FBM KLCI remained down, while the medium term trend has just turned bearish. The long term trend is still up, but is likely to subject to challenge very soon. With external negative factors continued to loom the market, the FBM KLCI is likely to continue its consolidation process with immediate downside support zone envisaged at 1,544 to 1,530.
Overnight, the Dow fell -265.87 points or -2.19% to close at 11,866.62. Today, the FBM KLCI is likely to trade within a range of 1,544 to 1,566.
This week's expected range: 1520 – 1586
Today’s expected range: 1544 – 1566
Resistance: 1558, 1562, 1566
Support: 1544, 1550, 1552
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