Stocks on Bursa Malaysia ended lower yesterday in very quiet trading as investors remained cautious over US economic developments and the ongoing European debt crisis. Investors were also adopting a wait-and-see attitude and anticipated more projects to be announced under the Economic Transformation Programme, before investing for the long term. The FBM KLCI closed 0.83 point easier at 1,579.84, after trading within a narrow range of between 1,577.76 and 1,581.69 throughout the day. Losers led advancers by 429 to 257, while 346 counters were unchanged. Turnover dwindled to 713.17 million shares, valued at RM1.37 billion, from 843.27 million shares, worth RM1.57 billion, recorded on Wednesday.
The FBM KLCI opened 0.61 point higher at 1,581.28 and moved to the intra-day high of 1,581.69 within the first forty minutes, and heavy profit-taking activity pressed the key index to the intra-day low of 1,577.76 before late bargain hunting on selected blue-chips lifted the index to close off low at 1,579.84. Chart-wise, the FBM KLCI formed a hangman-like candlestick in dark-cloud-cover position, which indicates selling activity had dominated the day, and the key index is likely to continue to consolidate in a range-bound manner. Immediate resistance lies at 1,585-point level.
MACD continued to slide lower and is below the signal line, indicating an increase in the downward momentum. RSI (14) hooked downward slightly to 57.2, reflecting the correction, and the relative strength remained in the mildly bullish zone. Stochastic was lower at 52.3, indicating a weakening market strength and the continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is likely to continue with its consolidation process with a downward bias in the near term.
The short term trend of the FBM KLCI is down, while the medium and long term trend remained up. The benchmark index is likely to continue to consolidate within a trading range of 1,566 to 1,585 with a downward bias. Immediate overhead resistance zone is at 1,585 to 1,597, while the downside support zone is at 1,574 to 1,566. With the volume getting thinner, the consolidation process is likely to extend.
Overnight, the Dow fell -54.49 points or -0.44% to close at 12,437.12. Today, the FBM KLCI is likely to trade within a range of 1,573 to 1,586.
This week's expected range: 1565 – 1614
Today’s expected range: 1573 – 1586
Resistance: 1582, 1584, 1586
Support: 1573, 1575, 1577