Stocks on Bursa Malaysia ended mixed as sentiment turned cautious amid the volatility in the share prices in regional markets. Sentiment remained cautious amid doubts that the pact for deeper economic integration among the European countries reached during last week’s EU summit could bring substantial results. The FBM KLCI was up 6.97 points or 0.48% to 1,467.10, after opening 3.6 points higher at 1,463.73. Losers led gainers by 362 to 357 while 325 counters were unchanged. Trading volume was higher at 1.595 billion shares worth RM1.129 billion from 1.296 billion shares worth RM1.057 billion shares on last Friday.
Taking cue from the strong overseas market performance last Friday, the FBM KLCI opened with an up gap of 3.6 points at 1,463.73 and traded higher to touch the intra-day high of 1,474.55 at late morning, thereafter, profit-taking activity came in and pushed the key index to close 7.45 points off high at 1,467.10. Chart-wise, the FBM KLCI formed a white inverted hammer candlestick which is a candle pattern that indicates possible bottom and reversal after a downtrend. Indeed, the key index tried to reverse up, but its effort was met with heavy resistance posted by the 5, 10 and 30-day SMA, and hence it may continue to consolidate. If the FBM KLCI is able to break through the immediate resistance zone at 1,468 to 1,475, then it may move higher to re-test the higher resistances.
MACD continued to slide lower and has made a dead-cross over its signal-line, flashing out a short term sell signal. Nonetheless, as MACD is still above the zero-line, current weakness may just well be part of a consolidation process is an uptrend. RSI (14) has hooked upward to 51.1, back to the neutral zone. Stochastic continued to slide lower to 54.3, indicating a continued loss in market momentum and a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is currently in consolidation mode with a downward bias.
The short term trend of the FBM KLCI remained down, but the key index has closed above the 20-day SMA. The medium term trend is sideways while the long term trend remained bearish. With the mixed signals, the FBM KLCI is likely to remain in sideways consolidation mode for a while until a clear sign of breakout is seen. Overnight, the Dow fell -162.87 points or -1.34% to close at 12,021.39. Today, the FBM KLCI is likely to trade within a range of 1,451 to 1,486.
This week's expected range: 1410 – 1529
Today’s expected range: 1451 – 1486
Resistance: 1474, 1480, 1486
Support: 1451, 1457, 1462
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