Stocks on Bursa Malaysia closed broadly lower yesterday, due to low risk appetite as investors took the cue from the weaker performance in regional and US markets. The FBMKLCI finished 25.2 points or 1.4% lower at 1,778.83 from last Thursday's close of 1,804.03, after fluctuated between 1,769.8 and 1,795.89 throughout the session, bogged down by index-linked counters. Losers outpaced gainers by 494 to 214, while 291 counters were unchanged. Volume amounted to 1.26 billion shares worth RM2.00 billion, as compared to Thursday's half-day trading of 769.16 million shares valued at RM1.3 billion.
Taking cue from the 326 points fall of the Dow overnight, the FBMKLCI opened 8.14 points lower at 1,795.89 and plunged to the intra-day low of 1,769.80 within the first forty five minutes after opening, losing 34.23 points at its worst. The key index rebounded from the low and climbed gradually higher to narrow the losses to 25.2 points at close. Chart-wise, the FBMKLCI formed a bearish black candlestick which indicates the bears or sellers were dominant for the day, and as the index is closing below the mid-range of the day, hence, the FBMKLCI may continue to consolidate today. Immediate overhead resistance zone is at 1,795 to 1,804, while the immediate downside support zone is at 1,777 to 1,769.
MACD hooked downward after hooking up on last Thursday, indicating the reversal on last Thursday is just a technical rebound or bull trap in a downtrend. RSI (14) hooked downward to 35.8 from 44.4, indicating the key index has again turned bearish. However, Stochastic was higher at 25 from 22.9, and continued to stay above the slow stochastic line, indicating the bearish down move yesterday have not reversed the short term up cycle. Readings from the indicators show that the FBMKLCI is in a bearish state, and is likely to continue to consolidate.
The trend of the FBMKLCI remained down and bearish as the index continued to stay below all the short, medium and long term moving averages. However, buying support was seen at the long term 200-day SMA support area as the key index managed to stage a rebound after piercing through it. However, a further break of the 200-day SMA support will see the FBMKLCI sliding lower to test the support of the 240-day SMA support at 1,759, follow by the 300 and 360-day SMA support level at 1,737 and 1,722. Nevertheless, as the much longer term uptrend is still intact, current weakness should be viewed as an opportunity to accumulate quality shares at lower level for longer term gains.
Overnight, the Dow rebounded 72.44 points or +0.47% to close at 15,445.24. Today, the FBM KLCI is likely to trade within a range of 1,741 to 1,822.
This week's expected range: 1760 – 1830
Today’s expected range: 1741 – 1822
Resistance: 1793, 1807, 1822
Support: 1741, 1755, 1767
Stocks to watch: CONNECT, DESTINI, IRIS, KNM, NTPM
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