Stocks on Bursa Malaysia ended marginally lower yesterday on late profit-taking activities with the FBM KLCI finishing 0.59 points lower at 1,582.35. The key benchmark index touched an all time intra-day high of 1,589.93 in the morning session but was unable to sustain the momentum due to lack of follow-through support. The market failed to take the cue from regional markets amid scattered participation by foreign fund managers. Decliners led advancers by 453 to 333 while 304 counters closed unchanged. Turnover declined to 728.860 million shares valued at RM1.377 billion from 801.954 million shares valued at RM1.4 billion on last Friday.
The FBM KLCI opened 1.18 points higher at 1,584.12 and fell to the intra-day low of 1,577.81 within the first ten minutes. The key index then rebounded strongly and rallied to touch an all time intra-day high of 1,589.93 at mid morning. The key index slipped lower from the intra-day high on active profit-taking activities to end the day in the red. Chart-wise, the FBM KLCI formed a black high-wave spinning-top candlestick which indicates high volatility in trading and indecision of market direction, and the bears were having a slight upper hand. The appearance of spinning-top candlestick at this level gives an early signal that the market may take a pause to consolidate itself before moving ahead to test the 1,600-point psychological target.
MACD continued to rise higher, indicating a continuation of the upward momentum. RSI (14) hooked downward marginally to 69.2, reflecting the mild correction, but is still in the bullish zone. Stochastic was lower at 93.5 and crossed below the slow stochastic line, reflecting the mild pullback in the key index, and nevertheless, the market strength is still strong. Readings from the indicators showed that the FBM KLCI is still bullish but is undergoing a pullback correction.
The underlying short, medium and long term trend of the FBM KLCI remained up. Immediate strong overhead resistance zone is envisaged at 1,590 to 1,600, while the downside support zone is at 1,570 to 1,560. Judging from the dwindling volume, the FBM KLCI is likely to move into consolidation mode over the next few days before the July 9th Bersih Rally.
The US market was closed yesterday for their Independence Day holiday. Today, the FBM KLCI is likely to trade within a range of 1,564 to 1,602
This week's expected range: 1545 – 1606
Today’s expected range: 1564 – 1602
Resistance: 1589, 1596, 1602
Support: 1564, 1571, 1576