Stocks on Bursa Malaysia ended weaker yesterday in line with the bearish sentiment on Asian markets on concern over the higher oil prices which will affect global growth. In the absence of fresh local catalysts the investors stayed on the sidelines to be further depressed by weak European economic data and China’s new export orders shrank in February. The FBM KLCI declined by 3.86 points, or 0.247%, to close at 1,556.66 after opening 1.39 points lower at 1,559.13. Losers led gainers by 689 to 217 while 264 counters were unchanged. Total turnover declined to 1.951 billion shares worth RM2.109 billion from 2.230 billion shares worth RM1.937 billion on Wednesday.
The FBM KLCI opened 1.39 points lower at 1,559.13 and rebounded to the intra-day high of 1,561.50-point near midday. However, the rebound could not sustain and the key index slipped lower on continued profit-taking activity to end the day at its lowest point. Chart wise, the FBM KLCI formed a bearish black inverted hammer candlestick which indicates continuation of selling pressure from a day before. As the key index has closed below the previous day’s low of 1,558.94, it is likely that it may continued its downward move today. Immediate support is at 1,549-point level.
MACD continued to slide lower after making a dead-cross yesterday, indicating a continued increase in the downward momentum. RSI (14) was lower at 60.4, reflecting the correction, and the short term relative strength is now weakened and is at the borderline of the bullish zone. Stochastic has hooked downward and crossed below the slow stochastic line, indicating the possible beginning of a down cycle. Readings from the indicators showed that the FBM KLCI is currently undergoing a correction and the correction is likely to extend.
The overall trend of the FBM KLCI remained up, nevertheless, the immediate short term trend has turned down as the key index has closed below the short term 5 and 10-day moving averages, but is still above the 20 and 30-day moving averages. Immediate downside support zone is at 1,553 to 1,540 while the overhead resistance zone is at 1,561 to 1,567. With the dwindling volume, the correction and consolidation process is likely to extend. Overnight, the Dow rebounded +46.02 points or +0.36% to close at 12,984.69. Today, the FBM KLCI is likely to trade within a range of 1,550 to 1,567.
This week's expected range: 1531 – 1584
Today’s expected range: 1550 – 1567
Resistance: 1560, 1564, 1567
Support: 1550, 1553, 1555
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