Stocks on Bursa Malaysia ended lower yesterday with the benchmark FBM KLCI 5.03 points or 0.32% easier on profit taking on selected blue-chips. Market sentiment continues to be plagued by the weakening ringgit against the US dollar, slowdown in China's economy, weakening of oil prices and nagging domestic concerns. At close, the FBM KLCI stood at 1,577.41 points, after hovering between 1,562.11 and 1,579.66 throughout the day. Losers led gainers by 448 to 360 with 305 counters remained unchanged. Total volume fell to 1.79 billion units valued at RM1.77 billion from 1.89 billion units valued at RM1.78 billion on Wednesday.
Following the bearish performance on Wall Street overnight, the FBM KLCI opened 7.93 points lower with a downside gap at 1,574.51 and plunged lower to hit the intra-day low of 1,562.11 forty five minutes after opening, losing 20.33 points at its worst. The key index rebounded from the low and climbed higher gradually for the rest of the day to touch the intra-day high of 1,579.66 just before closing at 1,577.44. Chart-wise, the FBM KLCI formed a bullish white hammer candlestick, a bottom reversal candlestick pattern, which indicates sellers were initially strong but later the buyers took over and pushed the index higher from the low surpassing the opening price or the morning session high, narrowing down the losses. Hence, the FBM KLCI is likely to stage further rebound if the buying momentum continues into today, otherwise, it may consolidate. Immediate overhead resistance zone is at 1,579 to 1,594, while the downside support zone is at 1,562 to 1,550.
MACD was marginally lower and showed sign of tapering, while its histogram contracted upward for the third bar, indicating further reduction in the momentum and a state of consolidation. RSI (14) hooked downward slightly to 25.3 from 26.1, indicating a mild pullback correction, and the key index is still in the very bearish state. Stochastic was higher at 9.5 from 7.4, indicating a small improvement in the index’s short term strength. Readings from the indicators showed that the FBM KLCI is in a state of consolidation, and is likely to further consolidate until a breakout is seen.
The broad technical picture of the FBM KLCI is still very much unchanged in that the trend is still down and bearish. However, the price action of the FBM KLCI over the last three sessions indicated that the key index has found support at the 1,562-point level and formed a double-bottom chart pattern, strengthening the support at 1,562-point. Nonetheless, as the main trend is still down, the support at 1,562-point may turn out to be just a temporary support in a downtrend until a confirmed reversal of trend is seen, and a break of the support at 1,562 will see the FBM KLCI plunging lower to the next lower zone of 1,550 to 1,500.
Overnight, the Dow fell 358.04 points or -2.06% to close at 16,990.69. Today, the FBMKLCI is likely to trade within a range of 1,548 to 1,597.
This week's expected range: 1485 – 1701
Today’s expected range: 1548 – 1597
Resistance: 1584, 1590, 1597
Support: 1548, 1555, 1566
Stocks to watch: BPPLAS, COCOLND, DSONIC, ESCERAM, FBMKLCI-HG, FBMKLCI-HK, FBMKLCI-HO, FBMKLCI-HU, FBMKLCI-HV, FBMKLCI-HW, FLBHD, HEVEA, HOMERIZ, INARI, KAREX, LCTH, LEESK, LUXCHEM, MINHO, NOTION, PENTA, POHUAT, SKPRES, TOMYPAK, YSPSAH
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