Stocks on Bursa Malaysia extended the downtrend from last Friday to finish on a weak note yesterday in line with its regional peers, as market players were cautious over the unresolved European debt crisis. The FBM KLCI ended 22.86 points or 1.56% lower at 1,446.26 after opening 4.33 points down at 1,469.12. Losers outnumbered gainers by 597 to 120 while 197 counters were flat. Turnover fell to 659.784 million shares worth RM1.17 billion from 739.612 million shares worth RM977.252 billion last Friday.
Taking cue from the Dow’s -303.68 points decline last Friday, the FBM KLCI opened with a down gap of 4.33 points at 1,464.79 and continued to plunge lower for the day with intermittent weak intra-day rebound. The key index hit the intra-day low of 1,443.93 before recovering slightly to close at 1,446.26. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates heavy selling pressure on the index. The key index has broken the moving averages (MA) support at 1,462 and the psychological support level at 1,450, and tested the support of 1,444 and rebounded off it. A continued breach of the immediate support at 1,442 will likely see the FBM KLCI revisiting the 1,423 point-level.
MACD has hooked downward slightly and the histogram was shorter, indicating a loss of momentum. RSI (14) plunged to 35.2, back to the bearish zone. Stochastic has hooked downward to 32.6, and crossed below the slow stochastic line, indicating a resumption of the down cycle. Readings from the indicators showed that the FBM KLCI is still bearish and is likely to extend its current consolidation process.
The trend of the FBM KLCI remained down and bearish. If the current downtrend prolong, the FBM KLCI is likely to further correct downward with possible targets of 1,410, 1,378, 1,350 and 1,293. Overnight, the Dow rose +68.99 points or +0.63% to close at 11,061.12. Today, the FBM KLCI is likely to trade within a range of 1,417 to 1,486.
This week's expected range: 1427 – 1508 Today’s expected range: 1417 – 1486
Resistance: 1460, 1473, 1486Support: 1417, 1430, 1438