Stocks on Bursa Malaysia closed lower yesterday as sentiment turned softer in line with the weaker Asian markets weighed by disappointing economic data from US and China. The benchmark FBM KLCI closed 2.85 points or 0.18% lower at 1,582.98. Decliners beat advancers by 519 to 260 while 307 counters were unchanged. Turnover was lower at 1.497 billion shares worth RM1.334 billion from 1.997 billion shares worth RM1.41 billion on last Friday.
The FBM KLCI opened 0.11 of a point lower at 1,585.72 and traded is a narrow sideways range in the positive territory. The key index managed to touch the intra-day high of 1,588.06 before succumbing to selling pressure that appeared in the afternoon session which pushed it to close at the day’s low of 1,582.98. Chart-wise, the FBM KLCI formed a small black inverted hammer candlestick which indicates buying was initially dominant but later selling pressure pressed the key index to close lower. The appearance of a black inverted hammer after an uptrend indicates weakness is surfacing and a reversal is in sight, and the FBM KLCI may trade lower today.
MACD has curved downward slightly and the histogram also turned slightly longer downward, indicating an initial change in the momentum’s direction from up to down. RSI (14) has hooked downward to 60 from 62.6 previously, indicating a loss in the short term relative strength which put the key index at the borderline of the bullish zone. Stochastic, however, was higher at 75.3, indicating the short term up cycle was still intact. Readings from the indicators showed that the FBM KLCI is experiencing a mild pullback correction, and nevertheless, the short term cycle is still up.
The overall trend of the FBM KLCI remained up, and the weakness that surfaced yesterday did not change the broad picture as the key index is still staying above all the short, medium and long term moving averages. A short downtrend for the FBM KLCI is only confirmed if the key index closed below the 30-day SMA at 1,571 and follow by the pivot low of 1,562. Immediate overhead resistance zone is at 1,588 to 1,594 while the downside support zone is at 1,580 to 1,570.
Overnight, the Dow rose +160.90 points or +1.23% to close at 13,241.63. Today, the FBM KLCI is likely to trade within a range of 1,576 to 1,594.
This week's expected range: 1559 – 1604
Today’s expected range: 1576 – 1594
Resistance: 1587, 1590, 1594
Support: 1576, 1579, 1581
Stocks to watch : UNISEM, KEYWEST
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