Stocks on Bursa Malaysia ended yesterday in negative territory on profit-taking as traders were increasingly concerned over the continuously depressed crude oil prices, Greek debt issues, as well as the implementation of the goods and services tax. At close, the benchmark FBM KLCI eased 4.47 points or 0.24% to 1,826.31 points, after hovering between 1,823.61 and 1,831.35 throughout the day. Losers overwhelmed gainers by 478 to 291 while 325 counters were unchanged. Total volume rose to 2.91 billion units worth RM1.57 billion from Tuesday’s 2.15 billion units worth RM2.45 billion.
Taking cue from the weak performance on Wall Street overnight, the FBM KLCI opened 0.57 of a point higher at 1,831.35, the intra-day high level, and plunged lower to 1,824.93 in the first thirty minutes. The FBM KLCI rebounded but selling pressure continued to pressed the key index to hit the intra-day low of 1,823.61 at mid-afternoon before a last hour bargain hunting lift the index to close off low. Chart-wise, the FBM KLCI formed a bearish engulfing candlestick pattern, a top reversal candlestick pattern which indicates heavy profit-taking after strong gains on the previous day. Hence, the FBM KLCI is likely to further consolidate on continued profit-taking activity. Immediate downside support zone is at 1,823 to 1,813, while the overhead resistance is at 1,832.
MACD was higher, but its histogram contracted downward, indicating a state of consolidation. RSI (14) hooked downward to 60.5 from 63.3, indicating a mild pullback correction, and the FBM KLCI is still in the bullish state. Stochastic was higher at 92.6 from 90, indicating short term overbought situation, and a pullback correction is expected ahead. Readings from the indicators showed that the FBM KLCI is in correction but the underlying strength is still strong.
The short and medium term trend of the FBM KLCI is up, and the long term trend is also just turning up with the FBM KLCI closing above the 200-day simple moving average (SMA). However, the longer term 240, 300 and 360-day SMA continued to post resistance to the FBM KLCI as active profit-taking was seen when the key index get near to the strong overhead resistance zone of 1,831. Hence, the FBM KLCI is likely to take a breather to consolidate first before making fresh attempt to break through the tough overhead resistance of 1,831. On the broader market, active rotational play on ACE market counters still continue to keep the market alive while blue-chips correct and consolidate.
Overnight, the Dow fell 77.94 points or -0.44% to close at 17,698.18. Today, the FBMKLCI is likely to trade within a range of 1,815 to 1,839.
This week's expected range: 1771 – 1850
Today’s expected range: 1815 – 1839
Resistance: 1830, 1834, 1839
Support: 1815, 1819, 1822
Stocks to watch: ASTINO, BPPLAS, CARIMIN, CONNECT, DIALOG, ECS, EKA, EWEIN, HHGROUP, JCY, KOMARK, LUXCHEM, MBMR, MNC, OCNCASH, PRESBHD, QL, SCH, SHH, SUNWAY, SUNZEN, UNISEM, VSOLAR
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