Stocks on Bursa Malaysia ended yesterday on a bearish note with sentiment buoyed by external factors like the Ireland debt issue and the conflict between North and South Korea. On top of that, the just-announced third-quarter Gross Domestic Product figures were not favourable to the market. The FBM KLCI slumped 15.67 points or 1.04% to end at 1487.53, after opening 3.64 points better at 1506.84. Decliners overwhelmed advancers by 784 to 96 while 196 counters were unchanged. Turnover rose to 1.175 billion shares, valued at RM2.009 billion, from 968 million shares, worth RM1.165 billion on Monday.
The FBM KLCI opened 3.64 points higher and surged to the intra-day high of 1508.34 within the first thirty minutes. Thereafter, heavy selling pressure appeared which sent the key index lower with intermittent rebound, and end at the lowest point for the day. Chart-wise, the FBM KLCI formed a long black candlestick which confirmed the reversal signal issued by the dark-cloud-cover candlestick pattern formed on Monday. With this formation, the key index is likely to continue its momentum to move further downward. The FBM KLCI is now closing at the immediate support of 1487, it is likely to breach this support and move further southward on impulse wave ‘C’ with a likely target at 1466, 1454 and 1438.
MACD continued to slide lower with its histogram turned longer, signifying the increase in downward momentum. RSI (14) is at 43.6 and has plunged below the 50 level, marking the entry of the FBM KLCI into the bearish state. Stochastic at 26.2 has also turned downward, marking the resumption of the bearish momentum after a brief pause. Signals from the indicators are all pointing toward a bearish outlook for the FBM KLCI in the near term.
With the FBM KLCI closing below its 1500 psychological support level and also below its short term moving averages, the short term trend has turned downward. Nevertheless, the medium to longer term trend still remained up. Immediate support level for the FBM KLCI is at 1479, 1474 and 1465 while the immediate resistance is at 1500.
Overnight, the Dow fell -142.21 points or -1.27% lower to close at 11,036.37. Today, the FBM KLCI is likely to trade within a range of 1460 to 1501.
This week's expected range: 1470 – 1525Today’s expected range: 1459 – 1501
Resistance: 1491, 1495, 1501Support: 1460, 1474, 1479