Stocks on Bursa Malaysia traded sideways yesterday on lack of catalysts in line with most regional markets, as markets will look at the US Federal Reserve meeting minutes later in the night for any indication of an early rate hike. At close, the benchmark FBM KLCI settled at 1,810.11, up 0.39 point or 0.02%, after fluctuating between 1,807.95 and 1,812.59 throughout the day. Losers outpaced gainers by 413 to 341, with 350 counters unchanged. Total volume stood at 1.92 billion shares worth RM1.94 billion, down from Tuesday’s 2.09 billion units worth RM1.99 billion.
Taking cue from the record close of the Dow overnight, the FBM KLCI opened 2.35 points higher at 1,812.07 and surged to hit the intra-day high of 1,812.59 shortly after opening. However, the upward move was hampered by profit taking activity which dragged the key index to hit the intra-day low of 1,807.95 at mid-afternoon, and some late hour bargain hunting activity helped lift the key index to close marginally higher. Chart-wise, the FBM KLCI formed a small black hammer candlestick, a bottom reversal candlestick pattern, which indicates the appearance of buyers later in the day after initial dominance by sellers, and the narrow range also indicates consolidation. Hence, the FBM KLCI is likely to further consolidate with mild upward bias. Immediate overhead resistance zone is at 1,812 to 1,819, while the downside support zone is at 1,807 to 1,800.
MACD was almost flat and is still below the signal-line and the zero-line, while its histogram further contracted upward, indicating further reduction in the bearish momentum. RSI (14) was marginally higher at 43.7 from 43.5, indicating a weak rebound and the relative strength of the FBM KLCI is still in a mildly bearish state. Stochastic was marginally higher at 28.9 from 28.2, indicating a state of consolidation. Readings from the indicators showed that the FBM KLCI is in a state of consolidation and is likely to further consolidate.
The trend of the FBM KLCI remained sideways range-bound as the key index got trapped within a cluster of short, medium and long term moving averages, and hence is likely to further consolidate until a breakout from the sideways range. The FBM KLCI is bound on top by a series of short, medium and long term moving averages with the highest moving average resistance at 1,833 posted by the 30-day SMA, and it is support below by a lesser number of moving averages with the lowest moving average support at 1,794-point by the 120-day SMA. A breakout from either side of this range will see the FBM KLCI moving in the direction of the breakout.
Overnight, the Dow fell 26.99 points or -0.15% to close at 18,285.40. Today, the FBMKLCI is likely to trade within a range of 1,803 to 1,817.
This week's expected range: 1780 – 1833
Today’s expected range: 1803 – 1817
Resistance: 1812, 1814, 1817
Support: 1803, 1805, 1807
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