Stocks on Bursa Malaysia ended lower yesterday on profit-taking activities and subdued buying support in line with regional bourses. The unveiling of the 11th Malaysia Plan to steer the country towards a developed nation by 2020 did not provide the spark for the equities market due to weaker external sentiment, as investors remained on the sidelines, adopting a wait-and-see approach. At close, the benchmark FBM KLCI fell 15.07 points or 0.83% to 1,795.04, after hovering between 1,793.34 and 1,810.71 throughout the day. Losers thumped gainers by 628 to 259, with 284 counters unchanged. Total volume was higher at 2.45 billion units worth RM2.28 billion from Wednesday’s 1.92 billion shares worth RM1.94 billion.
The FBM KLCI opened 0.26 of a point higher at 1,810.37 and slipped lower on profit taking activity. The key index rebounded to hit the intra-day high of 1,810.71 at mid-morning and pullback to move sideways range-bound till noon break. However, heavy selling pressure appeared after the noon break which saw the FBM KLCI plunging lower to hit the intra-day low of 1,793.34 just before closing, and some late bargain hunting activity lifted the key index to close off low. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates heavy selling pressure for the day, and the key index is likely to continue the downward momentum to slide lower today. Immediate downside support zone is at 1,793 to 1,774, while the overhead resistance zone is at 1,810 to 1,823.
MACD hooked downward and is below the signal-line as well as the zero-line, and its histogram also extended downward, indicating an increased in the bearish momentum. RSI (14) plunged to 37.8 from 43.7, indicating the FBM KLCI has turned bearish from a mildly bearish state. Stochastic hooked downward to 17.8 from 29 and crossed below the slow stochastic line, issuing a stochastic sell signal and indicated the rebound was over and the resumption of the down cycle. Readings from the indicators showed that the FBM KLCI has again turned bearish and is likely to slide lower.
With the bearish downward move yesterday, the trend of the FBM KLCI has turned down or bearish as the key index is closing below the short and medium term moving averages and it is also closing below most of the long term moving average. The FBM KLCI found support at the 120-day simple moving average (SMA) after piercing through it but rebounded to rest on it. Nevertheless, the 120-day SMA support still look fragile and a further break will trigger more bearish down move due to selling pressure. The 1793.34-point low formed yesterday coincided with the 38.2% Fibonacci retracement support level and a further break of this level will see the FBM KLCI retracing lower to the 50% Fibonacci support level at 1,770-point.
Overnight, the Dow was almost unchanged with a marginal gain of 0.34 points or 0.00% to close at 18,285.74. Today, the FBMKLCI is likely to trade within a range of 1,771 to 1,828.
This week's expected range: 1780 – 1833
Today’s expected range: 1771 – 1828
Resistance: 1806, 1817, 1828
Support: 1771, 1782, 1788
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