Share prices on Bursa Malaysia closed lower yesterday as investors continued to reduce their holdings, particularly in selected heavyweights, and investors were awaiting fresh leads from the US and European markets when these bourses opened later in the day, after being closed last Friday due to the Easter rest day. The benchmark FBM KLCI ended 7.59 points or 0.47% lower at 1,591.28 after opening 0.16 of a point higher at 1,599.03. Losers led gainers by 468 to 238 while 322 counters were unchanged. Total turnover declined to 1.076 billion shares worth RM1.077 billion from last Friday’s close of 1.275 billion units valued at RM1.143 billion.
The FBM KLCI opened 0.16 point higher at 1,599.03 but slid lower on selling pressure. It hit the low of 1,588.58 before rebounding to close off low. The key index was trading in the negative territory for a major part of the day. Chart-wise, the FBM KLCI formed a bearish engulfing candlestick which indicates the bears were fully in control. With the bearish down move yesterday, the FBM KLCI is likely to continue to slide lower today with an immediate downside target of 1,586 and 1,580.
MACD has made a dead-cross below the signal-line, flashing a short term sell signal. Nevertheless, as MACD is still above the zero-line, current weakness is being viewed as a short term correction in a bull market. RSI (14) plunged lower to 55.6 from previous reading of 61.7, indicating the short term relative strength is turning weaker but remained in the mildly bullish zone. Stochastic continued to slide lower to 59.9, indicating further weakening of the FBM KLCI and a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is undergoing a short term correction and may further consolidate.
The short term trend of the FBM KLCI is currently down as the key index has closed below the immediate short term 5 and 10-day SMA, and hence, the key index is expected to continue sliding lower to the next lower support zone at 1,586 to 1,582 provided by the 20 and 30-day SMA, and a close below the 30-day SMA may sound an alarm that the short term trend could have turn bearish. Nevertheless, the medium and long term uptrend is still intact.
Overnight, the Dow fell -130.55 points or -1.00% to close at 12,929.59. Today, the FBM KLCI is likely to trade within a range of 1,576 to 1,610.
This week's expected range: 1570 – 1630
Today’s expected range: 1576 – 1610
Resistance: 1598, 1604, 1610
Support: 1576, 1582, 1586
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