Stocks on Bursa Malaysia closed mixed yesterday with second and third liners making gains while heavyweights, CIMB, Petronas Chemicals and Maybank, were in the red. Trading was mild as most investors were still away for the Chinese New Year holidays. The FBM KLCI ended 2.9 points or 0.19% lower at 1,519.76, after opening 1.04 points higher at 1,523.7. Gainers overwhelmed losers by 389 to 315 with 296 counters unchanged. Some 1.34 billion shares, worth RM1.54 billion, changed hands compared with 1.65 billion shares, worth RM1.49 billion, registered last Friday.
The FBM KLCI opened 1.04 points higher at 1,523.70 and surged to the intra-day high of 1,527.57 within the first thirty minutes, and profit-taking activity immediately surfaced which pushed the key index into the negative territory and stayed there for the rest of the day. The key index hit the intra-day low of 1,518.35 before rebounding slightly to close off low. Chart wise, the FBM KLCI formed a bearish black inverted hammer in dark-cloud-cover pattern which indicates profit-taking activity was dominant yesterday, and the key index is likely to further consolidate today. Immediate downside support zone is at 1,516 to 1,509.
MACD continued to slide lower, albeit still above the zero-line, indicates a loss in the market momentum. RSI (14) hooked downward to 58.2, reflecting the pulled back in the index yesterday and falling of the relative strength to the mildly bullish zone. Stochastic, however, continued to move higher to 67.6 after crossing the slow stochastic line, indicating a possible continuation of the short term up cycle. Mixed signals from the indicators showed that the FBM KLCI might continue to consolidate in the short term.
The short term trend of the FBM KLCI is in sideways range-bound as the key index continues to stay within the triangle pattern with immediate overhead resistance at 1,530 and the downside support at 1,502. The medium to longer term trend, nonetheless, remained up. The overall market is likely to continue to be dominated by active trading in the third liners and penny stocks while the blue-chips continue to consolidate. Overnight, the Dow rebounded +81.21 points or +0.64% to close at 12,756.96. Today, the FBM KLCI is likely to trade within a range of 1,507 to 1,537.
This week's expected range: 1499 – 1537
Today’s expected range: 1507 – 1537
Resistance: 1526, 1532, 1537
Support: 1507, 1512, 1516
Stocks to watch: NAIM, MAS, BHIC, MAYBULK, 3A
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