Stocks on Bursa Malaysia managed to recover some of their losses at closing yesterday amid cautious sentiment as major regional markets fell on Greek woes. External factors including concerns over the European debt crisis, coupled with continued depression from crude oil prices affected investor sentiment across the region. The FBM KLCI fell 2.14 points or 0.14% to end at 1,562.52 after opening 3.34 points lower at 1,561.32. Decliners led advancers by 433 to 263 while 313 counters were unchanged. Total volume decreased to 788.372 million shares valued at RM1.337 billion from 1.076 billion shares valued at RM1.718 billion last Friday.
Taking cue from the poor performance of Wall Street last Friday, the FBM KLCI opened with a down gap of 3.34 points at 1,561.32 and hit the intra-day low of 1,560.32 within the first five minutes. The key index then rebounded to touch the intra-day high of 1,564.30 at noon before selling pressure pushed it to close off high at 1,562.52. Chart-wise, the FBM KLCI formed a white spinning-top candlestick which indicates the bears were trying to press down the key index, but the bulls were able to defense the index from breaking the important support at 1,560 when the index closed above the mid-point of the day. The FBM KLCI is now closing below the short term 5-day moving average (MA), but is still above the 10-day MA, indicating short term correction.
MACD has turned southward, and the histogram too is turning shorter, indicating a loss in the momentum. Nonetheless, as the MACD is still above the signal line, the present weakness is just a correction to the uptrend. RSI (14) is lower at 58.2, indicating the relative strength of the FBM KLCI is turning mildly bullish from bullish. Stochastic is at 83.6 and has crossed below the slow stochastic line, indicating a possible end to the short term up cycle and weakness is surfacing. Readings from the indicators showed that the FBM KLCI is beginning to turn weak in terms of momentum, and hence might continue to stay range-bound with a downward bias.
The underlying trend of the FBM KLCI remained up; however, weakness has begun to surface. Immediate support is at 1,560 provided by the 10-day MA, if the key index breaks below this level, there is a high likelihood that it may continue to slide lower towards the 1,550 critical support level. Overhead resistance zone remained at 1,566 to 1,577. With the dwindling volume, the FBM KLCI is likely to extend its consolidation while the overall market is likely to remain sluggish with speculative interest seen in the second and third liners.
Overnight, the Dow rose +108.98 points or +0.91% to close at 12,043.56. Today, the FBM KLCI is likely to trade within a range of 1,556 to 1,569
This week's expected range: 1540 – 1577Today’s expected range: 1556 – 1569
Resistance: 1565, 1567, 1569Support: 1556, 1558, 1560