Stocks on Bursa Malaysia closed slightly lower yesterday on mild profit-taking on palm oil stocks, and Asian stock markets were dampened by worries over the European debt crisis which forced investors to stay on the sidelines. The FBM KLCI eased 0.01 point to 1,660.22 after hovering between 1,653.63 and 1,661.83 throughout the day. Loser beat gainers by 336 to 304, while 369 counters were unchanged. Turnover slipped to 881.87 million shares worth RM1.27 billion from 979.983 million shares worth RM1.385 billion on Friday.
The FBM KLCI opened 0.19 point higher at 1,660.42 but slipped to the intra-day low of 1,653.63 within the first fifteen minutes of trading. The key index then rebounded and moved higher gradually to touch the intra-day high of 1,661.83 at late afternoon, but pulled back on profit-taking to close off high. Chart-wise, the FBM KLCI formed a Doji candlestick with long lower shadow which indicates initial selling pressure but later bargain hunters came in and lifted the key index to close off low. The appearance of a Doji candlestick with long lower shadow at this high level indicated uncertainty of market direction with a bearish bias, and the FBM KLCI is likely to further consolidate with immediate downside support zone at 1,653 to 1,650, where 1,650 is the critical psychological support level. A break below the 1,650-point level will likely see the key index slipping further to the next lower support at 1,640.
MACD was higher but its histogram contracted for the first time after eight sessions of expansion, indicating a slowdown in the upward momentum. RSI (14) was flat at 63.2, reflecting the little change in the key index and the short term relative strength is still in the bullish state. Stochastic was lower at 92 from 93.5, reflecting the pullback and consolidation of the key index. Readings from the indicators showed that the upward momentum of the FBM KLCI has slowed down and is likely to further consolidate.
The trend of the FBM KLCI remained up, as the key index is still staying above all the moving averages. However, the immediate short term 5-day SMA is currently at 1,656, and a close below the 1,656-point level will likely see the key index slipping lower to the 10-day SMA support level at 1,642. Total volume turnover remained on the low side, below the one billion shares mark, indicating a lack of interest in the market.
Overnight, the Dow fell 26.50 points or -0.19% to close at 13,583.65. Today, the FBM KLCI is likely to trade within a range of 1,647 to 1,670.
This week's expected range: 1604 – 1703
Today’s expected range: 1647 – 1670
Resistance: 1664, 1667, 1670
Support: 1647, 1650, 1655
Stocks to watch: 3A, ALAM, BENALEC, SCOMI, TIME, UEMLAND