Stocks on Bursa Malaysia finished higher for the second day yesterday on bargain hunting in Genting stocks and trade and services heavyweights. The local bourse stayed on a positive note throughout the trading session despite fragile investor sentiments over fear the rebound could be short-lived. Meanwhile, Asian equities were mostly lower as investors were wary over China’s economic stability following the early steep fall of its shares. The FBM KLCI was 2.84 points or 0.18% better at 1,582.44, after moving between 1,562.88 and 1,584.05 throughout the day. Gainers led losers by 557 to 259 with 298 counters unchanged. Total volume fell to 1.89 billion units valued at RM1.78 billion from 2.25 billion units valued at RM2.11 billion on Tuesday.
The FBM KLCI opened 15.08 points higher at the day’s high of 1,594.68, but slipped lower on heavy profit taking activity to hit the intra-day low of 1,580.25 at late morning, trimming most of the gains. The key index rebounded from the low and move sideways range-bound for the afternoon session. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates sellers were dominant for the day despite the index ended in the positive zone. Hence, the FBM KLCI is likely to stay in consolidation or slide lower today on continued profit taking. Immediate downside support zone is at 1,580 to 1,562, while the overhead resistance zone is at 1,594 to 1,600.
MACD continued to slide lower but its histogram contracted upward for a second bar, indicating further reduction in the bearish momentum and a state of consolidation. RSI (14) was higher at 26.1 from 24.9, indicating a slight improvement of the index’s short term relative strength but is still in a bearish state. Stochastic was higher at 7.4 from 5.2 and made a golden-cross over the slow stochastic line, issuing a stochastic buy signal and indicated an improvement in the index strength. Readings from the indicators showed that the FBM KLCI is in a state of consolidation.
The trend of the FBM KLCI is still down as the key index continues to stay below the short, medium and long term moving averages. The FBM KLCI made an attempt to break the 5-day simple moving average (SMA) yesterday when it opened above the 5-day SMA which is currently at 1,590. However, short term selling pressure continued to press the key index lower to close below the 5-day SMA. Hence, the FBM KLCI is likely to stay in range-bound consolidation within a range of 1,562 to 1,594 until a breakout is seen at either end of the range.
Overnight, the Dow fell 162.61 points or -0.93% to close at 17,348.73. Today, the FBMKLCI is likely to trade within a range of 1,562 to 1,609.
This week's expected range: 1485 – 1701
Today’s expected range: 1562 – 1609
Resistance: 1591, 1600, 1609
Support: 1562, 1571, 1576
Stocks to watch: BENALEC, BPPLAS, CAP, COCOLND, DSONIC, DESTINI, DIALOG, ECOFIRS, EVERGRN, IDMENSN, LITRAK, LUXCHEM, PADINI, PASUKGB, QL, RUBEREX, SIGN, SKPRES, SUPERMX, TAKAFUL, VS, WELLCAL
Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.