Stocks on Bursa Malaysia ended on a mixed note yesterday after a weak performance throughout the day with the market barometer remaining in the red, somewhat ignoring improved regional sentiment. The benchmark FBM KLCI was down 4.75 points to close at 1,561.3, after opening 0.61 of a point higher at 1,566.66. Market breadth was positive with gainers led losers by 433 to 385 while 346 counters were unchanged. Turnover was lower with 2.309 billion shares worth RM2.146 billion changed hands from Tuesday’s 2.546 billion shares, worth RM2.258 billion. 

The FBM KLCI opened 0.61 point higher at the intra-day of 1,566.66 and slipped lower on heavy profit-taking activity to the intra-day low of 1,558.55, it then rebounded slightly and moved in a narrow range in the negative territory for the rest of the day. Chart wise, the FBM KLCI formed a bearish engulfing candlestick which served to confirm the top reversal signal issued by the hanging-man candlestick on Tuesday, and the key index is likely to further consolidate today with immediate downside support envisaged at 1,558 follows by 1,553. 

MACD was higher but tapered off with the histogram turning shorter, giving an indication that the key index’s upward momentum is weakening. RSI (14) was lower at 68.3, reflecting the pullback. Nevertheless, the short term relative strength is still in the bullish zone. Stochastic has just made a crossover below the slow stochastic line, indicating a short term correction had started. Readings from the indicators showed that the FBM KLCI is undergoing a short term pullback correction in a bull market.

The overall trend of the FBM KLCI remained up. However, as the key index has just cross below the 5-day SMA, it is likely that the key index may slide lower towards the 10-day SMA support level at 1,548. As this is likely to be just a shallow pullback correction in a bull market, one should view this as an opportunity to accumulate quality share at lower level. Immediate downside support zone is at 1,558 to 1,548 while the overhead resistance zone is at 1,567 to 1,577. Judging from the dwindling volume, the broad market is likely to go into consolidation mode, however, penny stocks are still likely to dominate the active scene.

Overnight, the Dow fell -97.33 points or -0.76% to close at 12,780.95. Today, the FBM KLCI is likely to trade within a range of 1,549 to 1,575

This week's expected range: 1524 – 1589

Today’s expected range: 1549 – 1575

Resistance: 1566, 1571, 1575

Support: 1549, 1554, 1557