Stocks on Bursa Malaysia ended in red yesterday, weighed down by the Eurozone debt crisis that has struck global risk appetite, sending most equity markets weaker. The FBM KLCI ended the day 1.32 points or 0.08% lower at 1,596.19 after hitting an intra-day low of 1,593.92. Despite cautious trading, gainers outnumbered losers by 355 to 341 while 351 counters closed unchanged. Turnover rose to 2.079 billion shares worth RM1.625 billion from 1.049 billion shares worth RM1.263 billion on Monday.
The FBM KLCI opened 0.24 point higher at 1,597.75 and climbed to the intra-day high of 1,600.67 at mid-morning. However, selling pressure which emerged pressed the key index lower for the rest of the day to hit the intra-day low of 1,593.92 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction and sellers were still slightly dominant. The presence of a spinning-top candlestick after a prior downtrend indicated that the market was reluctant to move lower and may stage a rebound.
MACD and its histogram continued to slide lower, indicating a continued loss in the index’s momentum. Nevertheless, as the MACD is still above the zero-line, current weakness is being viewed as just a correction in a bull market. RSI (14) was lower at 56.3, indicating a continued loss in the short term relative strength, and is now moving lower into the mildly bullish zone. Stochastic was lower at 62.3 and has crossed below the slow stochastic line, indicating a loss in the market strength and possibly a continuation of the down cycle. Readings from the indicators showed that the FBM KLCI is losing its momentum and is likely to continue to consolidate.
The immediate short term trend of the FBM KLCI is down as the key index has closed below the 5 and 10-day SMA for the last two days. However, its medium to long term trend still remained up. With the momentum indicators showing a continued loss in the index’s momentum, the FBM KLCI is likely to stay sideways range-bound for the short term. Immediate downside support zone is at 1,593 to 1,586 while the overhead resistance zone is at 1,600 to 1,605. The sudden surged in the total volume yesterday was due to active trading in the ACE market stocks, while the main board was in consolidation mode.
Overnight, the Dow rose +194.13 points or +1.50% to close at 13,115.54. Today, the FBM KLCI is likely to trade within a range of 1,586 to 1,608.
This week's expected range: 1574 – 1623
Today’s expected range: 1586 – 1608
Resistance: 1600, 1604, 1608
Support: 1586, 1590, 1593
Stocks to watch: WTK, HIBISCS, HIBISCS-WA, DOMINAN
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