Stocks on Bursa Malaysia closed lower yesterday in line with other Asian bourses, after investors succumbed to profit taking after recent gains. Nonetheless, the FBM KLCI outperformed its regional peers by only retreating 0.073%, thanks to gains in selected blue-chips like YTL Power International, Public Bank and Hong Leong Bank. The benchmark FBM KLCI ended 1.20 points or 0.07% lower at 1,633.35, after opening at 1,634.65 and hovered between 1,630.73 and 1,637.51. Losers led gainers by 444 to 220, while 309 counters were unchanged. Volume fell to 951.110 million shares valued at RM1.335 billion from the 1.355 billion shares valued at RM1.739 billion on Monday.
The FBM KLCI opened 0.1 of a point higher at 1,634.65 and surged to the intra-day high of 1,637.51 within the first five minutes after opening. The key index slipped lower from the intra-day high on profit-taking to hit the intra-day low of 1,630.73 at mid afternoon before rebounding to close just slightly lower. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction with a downward bias, and the key index is likely to stay range-bound between 1,630 to 1,640.
MACD continued to slide lower but is tapering off, and its histogram further contracted upward, indicating a continued reduction in the downward momentum and a state of consolidation. RSI (14) hooked downward marginally to 36.9 from 37.5, reflecting the mild pulled back and the key index is still in the bearish zone. Stochastic, however, hooked upward to 33 from 30.4 and has crossed above its slow stochastic line. Readings from the indicators showed that the FBM KLCI is still in a consolidation mode.
The short and medium term trend of the FBM KLCI remained down, while the long term trend is still up. Nonetheless, the immediate short term trend has turned sideways as the key index is now bound between the 5 and 10-day SMA. An upside break of the 10-day SMA at 1,637 will likely see the FBM KLCI moving higher to test the immediate overhead resistance zone of 1,640 to 1,651, while a downside break of the 5-day SMA at 1,632 will see the key index sliding lower to the immediate support zone at 1,630 to 1,622. Total volume has shrunk to below one billion shares yesterday, indicating a lack of interest in the market as most investors stayed sidelines in view of a lack of catalyst and ahead of the long Chinese New Year holiday.
Overnight, the Dow gained 99.22 points or +0.71% to close at 13,979.30. Today, the FBM KLCI is likely to trade within a range of 1,623 to 1,644.
This week's expected range: 1578 – 1679
Today’s expected range: 1623 – 1644
Resistance: 1637, 1640, 1644
Support: 1623, 1627, 1630