Stocks on Bursa Malaysia ended lower yesterday due to the lack of fresh catalysts and nagging domestic issues, and unfavourable external developments, tracking the regional peers. The weaker bourse was in tandem with regional markets’ bearish sentiment amid concerns over Greece’s debt repayment talks. At close, the FBM KLCI fell 12.21 points or 0.60% to 1,722.16 after fluctuating between 1,722.16 and 1,734.40 throughout the day. Losers thumped gainers by 777 to 150, with 236 counters unchanged. Total volume contracted to 1.55 billion units worth RM1.52 billion from 1.14 billion units worth RM1.19 billion on Friday.
Taking cue from the weak close on Wall Street last Friday, the FBM KLCI opened 1.09 points lower at 1,733.28 but rebounded to hit the intra-day high of 1,734.40 after moving in a narrow range for the first two hours. The rebound could not sustain and the key index fell on continuous selling pressure and a last minute sell down on selected heavyweights dragged the FBM KLCI to close at the lowest point of the day. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates heavy selling pressure for the day, and hence, the FBM KLCI is likely to continue its downtrend to move lower today. Immediate downside support zone is at 1,718 to 1,706, while the overhead resistance zone is at 1,727 to 1,734.
MACD hooked downward slightly, and its histogram also extended southward for the first time after contracting upward for ten consecutive bars, indicating resumption in the bearish downward momentum after a brief period of consolidation. RSI (14) dropped to 25.8 from 29.7, indicating the relative strength of the key index is turning more bearish. Stochastic hooked downward to 10.3 from 13.1 and made a dead-cross over the slow stochastic line, issuing a selling signal, and indicated the FBM KLCI is turning weaker. Readings from the indicators showed that the FBM KLCI is again turning bearish after a brief period of consolidation last week, and hence is likely to slide lower.
The trend of the FBM KLCI is down and bearish as the key index continues to stay below the short, medium and long term moving averages. The FBM KLCI broke the immediate support of 1,727 yesterday on last minute sell down, and hence, is likely to fall further today on follow through selling to the next lower support zone of 1,718 to 1,706, follow by the critical psychological support of 1,700-point. And a further breach of the 1700-point psychological support will see the FBM KLCI revisiting the pivot low of 1,671-point and possibly even lower targets.
Overnight, the Dow fell 107.67 points or -0.60% to close at 17,791.17. Today, the FBMKLCI is likely to trade within a range of 1,706 to 1,746.
This week's expected range: 1708 – 1762
Today’s expected range: 1706 – 1746
Resistance: 1730, 1738, 1746
Support: 1706, 1714, 1718
Stocks to watch: BJAUTO, FBMKLCI-HB, FBMKLCI-HG, FBMKLCI-HI, FBMKLCI-HK, JIANKUN, PERWAJA, SUPER, TOPGLOV, WILLOW
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