KLCI_20111208Stocks on Bursa Malaysia ended broadly lower yesterday as wobbly external sentiments continued to weigh on the local bourse. Investors were cautious and stayed on the sidelines awaiting the outcome of European policymakers’ meeting this week, and economic data from Japan and Australia that signaled the global economy is slowing also influenced the local equity market sentiment. The FBM KLCI fell 10.07 points or 0.68% to close at 1,472.92 after opening 5.24 points lower at 1,477.75. Losers led gainers by 447 to 300 while 287 counters were unchanged. A total of 1.622 billion shares worth RM1.175 billion were traded compared with Wednesday’s 2.088 billion shares valued at RM1.770 billion.

The FBM KLCI opened with a down gap of 5.24 points at 1,477.75 and slid lower throughout the day with intermittent weak rebound, it hit the intra-day low of 1,469.93 before some late buying on selected blue-chips lifted the key index to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick with short lower shadow which indicates the bears were dominant for the day. With the down move yesterday, the key index has covered the gap formed on 1st December 2011, and is likely to further consolidate itself. Immediate support is at 1,469 to 1,464-point level provided by the 10, 20 and 30-day SMA. If this support zone could not hold, the key index is likely to slide further southward to the next lower support zone at 1,454 to 1,440.
MACD has hooked downward and the histogram too is turning shorter, indicating a change in the momentum from up to down. RSI (14) has turned downward to 53.4, indicating the relative strength of the key index is turning weaker even though it is still in the mildly bullish zone. Stochastic was at 69.9, and has crossed below the slow stochastic line, indicating the continued loss in the market strength and the beginning of a down cycle. Readings from the indicators showed that the FBM KLCI has turned weak or bearish, and is likely to further consolidate itself.

The short term trend of the FBM KLCI has turned down, while the medium and long term trend remained sideways. Immediate downside support zone is at 1,469 to 1,464 while the overhead resistance zone is at 1,478 to 1,485. With the overall volume slowed down, the overall market is likely to go into consolidation mode with some rotational play on the third liners. Overnight, the Dow fell -198.67 points or -1.63% to close at 11,997.70. Today, the FBM KLCI is likely to trade within a range of 1,461 to 1,486.

This week's expected range: 1410 – 1568
Today’s expected range: 1461 – 1486

Resistance: 1478, 1482, 1486
Support: 1461, 1465, 1469