Stocks on Bursa Malaysia ended on easier note yesterday following losses in selected plantation and banking counters. The local bourse also saw losses in second-liners on profit-taking as investor sentiment now was affected by the pressure on oil prices due to tensions in Iran, and this has dampened the manufacturing, transport and consumers sectors. The FBM KLCI closed 3.26 points or 0.21% lower at 1,560.52, after opening 0.04 point higher at 1,563.82. Losers led gainers by 541 to 302 while 298 counters were unchanged. Total turnover advanced to 2.230 billion shares worth RM1.937 billion from 1.894 billion shares worth RM1.747 billion on Tuesday.
The FBM KLCI opened 0.04 point higher at 1,563.82 and slipped to the intra-day low of 1,558.94 within the first hour of trading. The key index then rebounded to hit the intra-day high of 1,565.25 before pulling back to close off high. On the daily chart, the FBM KLCI formed a bearish black spinning-top candlestick which served to confirm the top reversal signal issued by the hanging-man candlestick formed on Tuesday. Hence, the FBM KLCI is likely to further correct downward with immediate support at 1,549-point level, which is a critical immediate support level. If this level could not hold, then the key index might visit the next lower support zone of 1,540 to 1,530.
MACD continued to slide lower, and has made a dead-cross below the signal-line, issuing a sell signal for the FBM KLCI. RSI (14) has hooked downward to 63.4, reflecting the pullback, but the short term relative strength is still in the bullish zone. Stochastic continued to move higher to 91.2, but is tapering off, indicating a slowdown in the upward strength. Readings from the indicators showed that the FBM KLCI is undergoing a mild pullback correction, and may continue to consolidate itself for the short term.
The general trend of the FBM KLCI remained up, as the key index continued to stay above all the moving averages. However, if the key index closes below the immediate short term support at 1,558 provided by the 5-day SMA, the FBM KLCI is likely to slide lower to test the immediate critical support at 1,549-point level. The broad market is likely to remain buoyant with the second and third liners dominating the active scene, while the index-link heavyweights may further consolidate.
Overnight, the Dow fell -27.02 points or -0.21% to close at 12,938.67. Today, the FBM KLCI is likely to trade within a range of 1,551 to 1,572.
This week's expected range: 1531 – 1584
Today’s expected range: 1551 – 1572
Resistance: 1565, 1568, 1572
Support: 1551, 1555, 1557
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