Stocks on Bursa Malaysia closed lower yesterday as investors reduced their holdings in selected finance counters ahead of the weekend. Losses were mostly seen in CIMB and Maybank which dragged the FBM KLCI 2.96 points or 0.19% lower to end the day at 1,520.90, while week-on-week, the key index declined 1.76 point from previous Friday’s 1,522.66. Gainers led losers by 459 to 370 while 292 counters were unchanged. Volume rose to 2.278 billion shares valued at RM1.849 billion compared with 1.957 billion shares worth RM1.692 billion on Thursday.
Last week, the start of Year of the Dragon saw mild trading as most investors had not returned from their Chinese New Year holiday. Lack of support kept the market easier on Wednesday with the FBM KLCI easing 2.9 points to 1,519.76 amid concerns over the Euro debt crisis, but bargain hunting prompted a rebound the following day with a gain of 4.1 points to 1,523.86. On Friday, the market eased a bit as investors were reluctant to take bigger exposures ahead of the weekend amid uncertainty in Europe.
On the weekly chart, the FBM KLCI formed a small black spinning-top candlestick which indicates indecision of market direction and consolidation with a downward bias. On the daily chart, the key index formed a small black candlestick which also indicates consolidation. In short, the FBM KLCI was basically in a sideways range-bound mode with immediate overhead resistance at 1,530 and a downside support at 1,514. A breakout from the 1,530-point resistance level will likely see the FBM KLCI moving higher with the next target at 1,553.
Weekly MACD was higher, however, its histogram was turning shorter, indicating a slow down in the weekly upward momentum. Daily MACD, nonetheless, continued to slide lower, reflecting the consolidation mode on the daily chart. Weekly RSI (14) hooked downward slightly to 56.2, and daily RSI (14) also turned lower to 58.1, indicating both the weekly and daily relative strength were in the mildly bullish zone. Weekly Stochastic was lower at 93.9 and has gone below its weekly slow stochastic line, and daily Stochastic has also hooked downward to 72.9, reflecting the consolidation and mild loss in weekly and daily momentum. Readings from the indicators showed that the FBM KLCI is in a consolidation mode from both the weekly and daily perspective, and this situation is likely to continue until a firm breakout is observed in either one direction.
The short term trend of the FBM KLCI has turned sideway, while the medium and long term trend remained up. This week, Bursa Malaysia is likely to trend higher along with other regional markets, boosted by positive news from the US and Europe. Last Friday, the Dow fell -74.17 points or -0.58% to close at 12,660.46. This week, the FBM KLCI is likely to trade within a range of 1,507 to 1,538, and for today, it is likely to trade within a range of 1,514 to 1,529.
This week's expected range: 1507 – 1538
Today’s expected range: 1514 – 1529
Resistance: 1524, 1526, 1529
Support: 1514, 1516, 1518
Stocks to watch: KNM, CYPARK, PUNCAK, KHSB, PRESBHD, SILKHLDG
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