Stocks on Bursa Malaysia closed on an easier note yesterday amid weak performance by financial stocks including RHB Capital, CIMB and Maybank. Sentiment on the broader market was weak, tracking the weaknesses in Asian stocks following overnight losses on Wall Street. The market was quiet amid lack of fresh buying interests on concerns over global growth after the Federal Reserve lowered forecast for US economic growth this year and 2012. The benchmark FBM KLCI fell by 4.16 points or 0.27% to close at 1,563.19. Losers led gainers by 393 to 330 while 308 were unchanged. Volume increased to 875.69 million shares valued at RM1.43 billion from 847.12 million shares valued at RM1.52 billion yesterday.
The FBM KLCI opened 1.31 points lower at 1,566.04 and rebounded to the intra-day high of 1,567.19, but profit-taking activities continued to pressed the key index to the intra-day low of 1,562.20 before closing off low at 1,563.19. Chart-wise, the FBM KLCI formed a bearish Harami candlestick pattern, which is a top reversal pattern. As it was mentioned yesterday, the bullish candlestick formed the day before could turn out to be a bull-trap, and it did. The key index has now retraced below the strong resistance level of 1,566, and may continue to consolidate below this level for the time being.
MACD was marginally higher, but the histogram was shorter, indicating a loss in the upward momentum. RSI (14) fell to 59.3, indicating the relative strength of the key index has turned mildly bullish from bullish. Stochastic is higher at 89.1, but is tapering off, indicating a gradual loss in market strength even though the short term up cycle is still intact. Readings from the indicators showed that the FBM KLCI is losing its upward momentum and may take a breather and consolidate itself.
The underlying trend of the FBM KLCI remained up. However, the upward momentum is not there, as can be seen from the average daily volume of around 820 million shares over the last two weeks. The overall market is likely to continue to drift sideways for a while. Immediate overhead resistance zone is at 1,566 to 1,577, while the downside support zone is at 1,560 to 1,550.
Overnight, the Dow fell -59.67 points or -0.49% to close at 12,050.00. Today, the FBM KLCI is likely to trade within a range of 1,556 to 1,573.
This week's expected range: 1529 – 1585Today’s expected range: 1556 – 1573
Resistance: 1566, 1570, 1573Support: 1556, 1559, 1561
Stocks to watch: EQUINE, DIJACOR, KURASIA