Stocks on Bursa Malaysia closed
lower yesterday on across-the-board selling pressure in key blue-chip counters
with the FBM KLCI losing 7.65 points or 0.48% to close at 1,594.24. Persistent
selling has been evident in the market since the day before and even the
listing of Felda Global Ventures Holdings Bhd (FGVH), the world’s second
largest initial public offering (IPO), could not help prop it up. Losers led
gainers by 476 to 248 while 306 counters were unchanged. Turnover rose to 1.563
billion shares valued at RM2.741 billion from the 1.179 billion valued at
RM1.631 billion on Wednesday.
The FBM KLCI opened 0.52 point higher at 1,602.41 and surged
to the intra-day high of 1,602.98 within the first minute after opening, and
heavy profit-taking activity sent the key index down to the intra-day low of
1,591.85 at mid morning before rebounding to move sideways. Chart-wise, the FBM
KLCI formed a bearish engulfing candlestick which indicates heavy selling
pressure on profit-taking, and the key index is likely to fall further or
consolidate itself today. Immediate downside support zone is at 1,591 to 1,581
while the resistance zone is at 1,602 to 1,611.
MACD has hooked downward slightly while its histogram has
turned shorter, indicating a continued loss in the key index’s momentum.
Nevertheless, as the MACD is still above the signal-line, the current weakness
is viewed as a correction is a bull market. RSI (14) slipped lower to 56.4 from
61.7 previously, indicating the short term relative strength has turned mildly
bullish from bullish. Stochastic was lower at 64.8, indicating further loss in
market strength 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
is likely to further consolidate itself.
The short term trend of the FBM KLCI has again turned weak
as the index is currently closing below the short term 5 and 10-day SMA, and is
likely to slip lower to the next support level provided by the 20-day SMA at
1,583. Nevertheless, the medium and longer term uptrend still remained intact.
As the market is coming to a mid-year closing today, some window dressing
activity is expected which might give some support to the key index.
Overnight, the Dow fell -24.75 points or -0.20% to close at 12,602.26.
Today, the FBM KLCI is likely to trade within a range of 1,578 to 1,614.
This week's expected range: 1559 – 1636
Today’s expected range: 1578 – 1614
Resistance: 1601, 1608, 1614
Support: 1578, 1585, 1589
Stocks to watch: MISC, TAMBUN, HOHUP, IJACOBS, PENERGY
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