KLCI_20111115

Stocks on Bursa Malaysia ended in red yesterday as sentiment remained bearish due largely to European debt woes. Nevertheless, the FBM KLCI closed off its lows with interest seen in selective heavyweights and penny stocks. At the close, the benchmark index slipped 1.65 points or 0.11% to 1,477.22 after moving between 1,473.71 and 1,478.75. Decliners led advancers by 466 to 341 while 258 counters were unchanged. A total of 2.984 billion shares valued at RM1.554 billion changed hands compared with Monday’s 2.849 billion shares worth RM1.885 billion. 


The FBM KLCI opened with a down gap of 3.21 points at 1,475.66 and slid to the intra-day low of 1,473.71. The key index then rebounded to hit the intra-day high of 1,478.75 at noon, and was hovering between the high and low levels till closing. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick which indicates indecision of market direction but with an upward bias. The key index is likely to continue its current sideways consolidation with an upward bias for today, as it is still trapped within the triangle. Immediate overhead resistance zone is at 1,485 to 1,493 while the downside support zone is at 1,473 to 1,466.


MACD has made a dead-cross over its signal-line, flashing a sell signal, and indicated that the upward momentum is diminishing and the correction may prolong. RSI (14) was marginally lower at 56.9, reflecting the mild correction. Stochastic continued to dive lower to 74.1, indicating a continuation of the down cycle and market weakness. Readings from the indicators showed that the FBM KLCI is currently undergoing a consolidation phase, and this may prolong until there is clear signs of a breakout.


The immediate short term trend of the FBM KLCI has turned sideways as indicated by the 5 and 10-day moving averages (MA) which has turned flat, while the short term trend as represented by the 20 and 30-day MAs remained up. The medium and long term trend is now sideways. The FBM KLCI is likely to continue its consolidation, and judging from the high volume with a low unit price, the index-link counters will continue to consolidate while the penny stocks will continue to dominate the active counters list.


Overnight, the Dow rose +17.18 points or +0.14% to close at 12,096.16. Today, the FBM KLCI is likely to trade within a range of 1,469 to 1,484.


This week's expected range: 1435 – 1516

Today’s expected range: 1469 – 1484


Resistance: 1480, 1482, 1484

Support: 1469, 1471, 1474