Stocks on Bursa Malaysia ended lower yesterday on active selling in blue-chip counters ahead of the year-end holidays. The local market came under pressure in line with the generally negative sentiment in most regional markets brought on by rising fears that Europe’s sovereign debt situation may worsen. The global market outlook was further dampened as China’s manufacturing purchasing managers’ index had showed that its factory activity shrank in December. In the midst of a wobbly external outlook, the FBM KLCI fell 12.61 points or 0.85% to close at 1,465.17. Losers led gainers by 429 to 328 while 299 counters were unchanged. Turnover was slightly higher at 1.642 billion shares worth RM738.23 million from 1.601 billion shares worth RM1.03 billion on Monday.
Taking cue of the weak performance on Wall Street overnight, the FBM KLCI opened 1.91 points lower at 1,475.87 and slid lower throughout the day to hit the intra-day low of 1,464.31 before rebounding slightly to close at 1,465.17. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates that the bears were fully in control yesterday. The key index has made a pulled back after a strong up move the day before and is now sitting right of the 20-day SMA. Immediate support zone is at 1,463 to 1,460, where 1,460 coincided with the 50-day SMA, and a close below 1,460-point level is likely to see the key index turning weak and may fall further southward to test the 1,450-point psychological support.
MACD has turned downward after climbing for two days, indicating a resumption of the downward momentum, and continuation of the short term consolidation. RSI (14) has also made a turn and was lower at 49.95, indicating the key index has moved back to the neutral zone. Stochastic also hooked downward to 44.8, indicating the rebound has failed and the down cycle is likely to continue. Readings of the indicators showed that the FBM KLCI has again turned weak and bearish bias, and the consolidation process is likely to extend.
The trend of the FBM KLCI is currently sideways with a downward bias as the key index is trapped within the cluster of short, medium and long term moving averages. The critical support level now is the pivot low of 1,448 formed on December 15, if this support level is breached, the FBM KLCI is likely to re-visit the support at 1,423. The overall market is likely to be dominated by active trading in the penny stocks while the FBM KLCI continues to consolidate. Overnight, the Dow rose +337.32 points or +2.87% to close at 12,103.58, and today, the FBM KLCI is likely to trade within a range of 1,448 to 1,489.
This week's expected range: 1425 – 1501
Today’s expected range: 1448 – 1489
Resistance: 1473, 1481, 1489
Support: 1448, 1456, 1460
Stocks to watch: KEURO, JCY, IGB, BHIC, YINSON
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