Stocks on Bursa Malaysia ended broadly lower yesterday as global debt fears continued to affect investor sentiment. However, bargain hunting on key heavyweights such as Petronas Chemicals helped trim the losses. The benchmark FBM KLCI fell 6.94 points or 0.44% to close at 1,555.64. Losers led gainers by 429 to 292 while 323 counters were unchanged. Turnover increased to 977.863 million shares worth RM1.939 billion from 753.757 million shares worth RM1.382 billion on Monday.
The FBM KLCI opened 0.1 point lower at the day’s high of 1,562.48 and fell to the intra-day low of 1,552.71 with intermittent weak rebound. The key index rebounded strongly at late afternoon to 1,561.58, recovering much of the loss ground, but last minute liquidation push the index to close at 1,555.64. Chart-wise, the FBM KLCI formed another bearish black candlestick with a short lower shadow, and it shows that the bear was still in control for the day. As expected, the key index had came down to test the 60-day moving average (MA) support, which is now at 1,553.35, and rebounded off it. This shows some buying support from the medium term investors at the current level. Immediate critical support for the FBM KLCI is the 1,550-point psychological support level, if this support level could not hold, there is a high probability that the FBM KLCI may slide further southward to test the long term 120-day support at 1,536.
MACD continued to slide lower, indicating the bearish momentum is gaining strength. RSI (14) was lower at 38.9, indicating the short term relative strength of the key index has turned bearish. Stochastic continued to slide lower to 17.1, entering the short term oversold zone. Readings from the technical indicators showed that the FBM KLCI is currently bearish, and the correction is likely to extend. However, as the stochastic indicator showed that the market is short term oversold, some rebound maybe expected soon.
The short term trend of the FBM KLCI remained down, while the medium term trend is being tested but is still up. The long term uptrend, nonetheless, is still intact. Immediate downside support zone is at 1,552 to 1,536, while overhead resistance zone is at 1,566 to 1,597.
Overnight, the Dow rose +202.26 points or +1.63% to close at 12,587.42. Today, the FBM KLCI is likely to trade within a range of 1,541 to 1,572
This week's expected range: 1544 – 1606
Today’s expected range: 1541 – 1572
Resistance: 1562, 1567, 1572
Support: 1541, 1547, 1551
Stocks to watch: KURASIA, DXN, WIJAYA