Stocks on Bursa Malaysia closed lower yesterday weighed down by losses in plantation counters. Plantation companies were the biggest losers after the Malaysian Palm Oil Board released data indicating that Malaysia's September crude palm oil production rose 12.12 per cent, month-on-month, to 1.869 million tonnes and stockpile increased 12.4 per cent to 2.119 million tonnes while exports fell 8.8 per cent to 486,882 tonnes. The FBM KLCI fell 3.01 points or 0.21% to 1,397.04 after hovering between 1,392.10 and 1,399.35 throughout the day. Losers outnumbered gainers by 335 to 278 while 267 counters were unchanged. Total market volume decreased to 584.909 million shares, worth RM632.688 million, from Friday’s 964.611 million units valued at RM1.31 billion.
The FBM KLCI opened 1.43 points lower at 1,398.62 and plunged to the intra-day low of 1,392.10 within the first fifteen minutes after opening. It then rebounded to the intra-day high of 1,399.35 but continued to face selling pressure which pressed it to hover near the low throughout the day before a last minute buying on selected blue-chips which lifted it to close at 1,397.04. Chart-wise, the FBM KLCI formed a black hanging man candlestick which indicates the surfacing of selling pressure, and as the key index was trading within the previous day’s candle range, it was consolidating itself after the recent rally. The FBM KLCI might continue to consolidate until a clear breakout sign either up or down is observed.
MACD continued to climb higher, indicating a continued increased in the upward momentum. Nonetheless, the MACD is still in the bearish zone. RSI (14) hooked down slightly to 45.5 reflecting the mild pullback in the key index, and the relative strength continued to remain mildly bearish. Stochastic continued to climb higher to 74.7, indicating a continuation in the short term up cycle as well as improvement in the market strength. Readings from the indicators showed that the momentum of the FBM KLCI is gradually picking up even though the overall picture is still a bit bearish.
The medium and long term trend of the FBM KLCI remained down, while the short term trend is up despite the mild pullback yesterday. As the FBM KLCI is currently above the 5 and 10-day moving averages (MA), but is below the 20 and 30-day MAs, the key index is likely to move range bound with an upward bias in the short term. Immediate overhead resistance zone is at 1,403 to 1,423 while the immediate downside support zone is at 1,391 to 1,380. Overnight, the Dow rose +330.06 points or +2.97% to close at 11,433.18. Today, the FBM KLCI is likely to trade within a range of 1,385 to 1,407.
This week's expected range: 1336 – 1452
Today’s expected range: 1385 – 1407
Resistance: 1400, 1403, 1407
Support: 1385, 1388, 1392
Stocks to watch: JCY, UNISEM, TGOFFS
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