Stocks on Bursa Malaysia closed
on easier note yesterday following weak global market sentiment and
profit-taking. Concerns over the poor external economic environment continued
to rise after US Federal Reserve signaled weaker economic outlook and a slower
drop in unemployment rate. The FBM KLCI fell by 2.96 points or 0.18% to close
at 1,601.43 after opening 1.55 points higher at 1,605.94. Losers led gainers by
424 to 354 while 316 counters were unchanged. Turnover rose to 1.572 billion
shares worth RM1.577 billion from 1.401 million shares worth RM1.763 billion
yesterday.
The FBM KLCI opened 1.55 points higher at 1,605.94 and
surged to the intra-day high of 1,607.31 within the first five minutes after
opening, and profit-taking pressure which emerged pressed the key index lower
for the rest of the day to hit the intra-day low of 1,599.75 before rebounding
slightly to close off low. Chart-wise, the FBM KLCI formed a dark-cloud-cover
candlestick pattern which did not penetrate below the mid point of the previous
day’s candle, and this indicated mild profit-taking activity. It is likely that
the FBM KLCI may continue to slip lower today to consolidate itself. Immediate
downside support zone is at 1,599 to 1,594 while the overhead resistance zone
is at 1,607 to 1,609.
MACD and its histogram continued to rise, indicating the
upward momentum is still intact. RSI (14) has hooked downward to 64 from 66.1
previously, reflecting the mild profit-taking activity, and the short term
relative strength is still in the bullish state. Stochastic was marginally
higher at 95.9 and is tapering off, indicating a reduction in the market
strength, but the short term up cycle is still intact. Readings from the indicators showed that the
FBM KCLI is undergoing a mild profit-taking process and the overall upward
momentum is still intact.
Despite the pullback yesterday, the overall trend of the FBM
KLCI remained up as the key index is still above all the moving averages. The
FBM KLCI is likely to stage a re-test of the historical high of 1,609.33 after
the correction is over. With the overall volume improving, the market is likely
to see more rotational play.
Overnight, the Dow fell -250.82 points or -1.96% to close at
12,573.57. Today, the FBM KLCI is likely to trade within a range of 1,590 to
1,615
This week's expected range: 1561 – 1614
Today’s expected range: 1590 – 1615
Resistance: 1606, 1611, 1615
Support: 1590, 1595, 1598
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