Stocks on Bursa Malaysia
closed lower yesterday in a broad-based sell-off amid uncertainty in the
short-term market outlook. The local market saw renewed selling pressure after
a weekend of political uncertainty in Europe as an unresolved political
stalemate in forming a government in Greece weighs on investor sentiment.
The FBM KLCI was 9.24 points or 0.6% lower at 1,575.08. Decliners led advancers
by 694 to 158 while 223 counters were unchanged. Turnover declined to 977.909
million shares valued at RM1.12 billion from the 1.114 billion shares worth
RM1.21 billion last Friday.
The FBM KLCI opened 2.26 points lower at 1,582.06 and
rebounded to hit the intra-day high of 1,584.63 within the first five minutes of
trading, and the key index slid lower on profit-taking activity and moved
range-bound before late afternoon selling pressure which pushed the key index
to the intra-day low of 1,574.67. The FBM KLCI finally settled slightly off
low. Chart-wise, the FBM KLCI formed a bearish long black candlestick which
indicates the bears were in control for the day, and the downward momentum is
likely to send the key index lower today. Immediate downside support is at
1,566-point level, if the FBM KLCI breached this support level, then it is
likely to fall further downward to the 1,538-point level, the 23.6% Fibonacci
retracement level measuring from the September 26th 2011 pivot low
to the 1,609.33 pivot high.
MACD has hooked southward together with its histogram, indicating
an acceleration in the bearish momentum. RSI (14) slid lower to 42.9 from 49.1
previously, indicating an increase in the bearish relative strength. Stochastic
slid downward to 59.2 and has crossed below its slow stochastic line,
indicating an end to the recent short term up cycle and the beginning of
another bearish down cycle. Readings
from the indicators showed that the bearish momentum of the FBM KLCI is picking
up and the key index is likely to fall further.
The short term trend of the FBM KLCI remained down as it
continued to stay within the downtrend channel and below the short term moving
averages. The key index has also closed below the medium term 50 and 60-day
SMA, indicating the medium term outlook is also bearish. However, the long term
trend is still up, but is likely to be challenged soon. With the total volume
falling below the one billion shares mark, the market is likely to stay quiet
amid a bearish outlook.
Overnight, the Dow fell -125.25 points or -0.98% to close at
12,695.35. Today, the FBM KLCI is likely to trade within a range of 1,561 to
1,595.
This week's expected range: 1556 – 1610
Today’s expected range: 1561 – 1595
Resistance: 1582, 1588, 1595
Support: 1561, 1568, 1571
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