Stocks on Bursa Malaysia ended mixed yesterday amid selective buying and profit-taking capping the rise. Negative vibes from abroad dent sentiment across the region as major US equity indices overnight fell between 1.1% and 1.5%, while persistent worries that Europe would not be able to prevent the sovereign debt crisis from spreading further, triggered the regional markets downtrend. At the close, the FBM KLCI rose 0.99 of a point or 0.1% to 1,464.11 after opening 3.25 points lower at 1,458.10. Losers led gainers by 380 to 346 while 314 counters were unchanged. Turnover was higher at 1.6 billion shares valued at RM1.25 billion from Wednesday’s 1.5 billion shares worth RM1.08 billion.

Taking cue from the weak performance on Wall Street overnight, the FBM KLCI opened with a down gap of 3.25 points at 1,458.10 and plunged to the intra-day low of 1,448.54 within the first twenty minutes, and the key index rebounded to gradually recover its lost ground to end the day near the intra-day high of 1,464.52. Chart-wise, the FBM KLCI formed a bullish white hammer candlestick, a bottom reversal candle pattern, which indicated that the key index was first being driven lower on fear but buying support later lifted it to close near the high of the day, and the FBM KLCI may continue its upward momentum to move higher today. The long lower shadow of the candlestick showed that support near the 1,450-point level was strong, and judging from the candlestick pattern formed over the last few sessions, the key index is trying to build base around the 1,460-point level. 

MACD continued to slide lower, indicating a continued loss in the market momentum. RSI (14) has hooked upward slightly to 49.97, indicating the short term relative strength of the key index is in a neutral state. Stochastic was lower at 49.2, indicating a continued loss in market strength and the short term down cycle is intact. Readings from the indicators showed that the FBM KLCI is continuing its consolidation. 

The short term trend of the FBM KLCI remained down, and nevertheless the key index is finding support from the 20-day SMA as it has been able to close above this moving average after piercing through it in the last three sessions. The key index also closed above the 5-day SMA, indicating the short term selling pressure is gradually diminishing, and hence, the FBM KLCI might stage a rebound to move higher today. Immediate overhead resistance zone is at 1,466 to 1,475 while the downside support zone is at 1,456 to 1,448. 

Overnight, the Dow rose +45.33 points or +0.38% to close at 11,868.81. Today, the FBM KLCI is likely to trade within a range of 1,437 to 1,481.

This week's expected range: 1410 – 1529

Today’s expected range: 1437 – 1481

Resistance: 1469, 1475, 1481

Support: 1437, 1443, 1453

Stocks to watch: JCY, BOILERM, RSAWIT