Stocks on Bursa Malaysia ended last week on a firmer note boosted by buying interest from investors, although the benchmark FBM KLCI closed in the red on Friday. The market barometer remained in negative territory for the day weighed by the easing of selected heavyweight stocks and concerns of inflation. The FBM KLCI eased 0.75 point to 1,565.06 after opening 0.77 point better at 1,566.58, week-on-week, it fell 12.19 points from 1,577.25 points the previous week. Market breadth was positive with gainers outnumbering losers by 462 to 249, while 332 counters were unchanged. Volume decreased to 1.166 billion shares worth RM1.993 billion compared with 1.2 billion shares worth RM2.6 billion transacted on Thursday, while weekly volume increased to 4.900 billion shares valued at RM9.243 billion from 3.798 billion shares valued at RM7.22 billion the previous week.
The FBM KLCI opened last week 1.02 points lower at 1,576.23 and slid lower throughout the day to end 14.67 points lower at 1,562.58, on concerned over the lingering global debt situation which continued to influence the performance of global stock markets. The key index continued its slide on Tuesday to hit the intra-week low of 1,552.71 before rebounding to close 6.94 points lower at 1,555.64. On strong overnight rebound of the US stock market and positive leads from Asian bourses, the FBM KLCI rebounded 6.95 points higher to close at 1,562.59 on Wednesday. On Thursday, the key index continued its rise to end 3.22 points better at 1,565.81, and the market was generally supported by buying interest in newly-listed Bumi Armada which was the top gainer and most actively traded stock. The FBM KLCI ended the week to ease 0.75 point to 1,565.06 on profit-taking in selected blue-chips.
On the weekly chart, the FBM KLCI formed a black hammer-like candlestick which indicates sellers were initially strong in pushing the key index down for the week, but buyers later surfaced to push the index back to slightly above the mid range of the week. As the rebound was not very strong, the FBM KLCI is likely to continue to consolidate this week. The key index is currently sitting right on the 10-week moving average (MA), a close this week below the 1,565 level will likely see the index sliding lower to test the next level of support at 1,545 to 1,540 provided by the 20 and 30-week MAs. On the daily chart, the FBM KLCI formed a hanging-man candlestick, which is a top reversal candlestick pattern, on last Friday, and the key index is likely to correct itself after two days of rebound last week. Immediate support zone lies at 1,560 to 1,552.
Weekly MACD continued to slide lower, indicating a reduction of the weekly momentum, and nonetheless, it is still above its weekly signal line. Daily MACD continued to slide lower, but at a reduced pace, as indicated by the shorter histogram. Weekly RSI (14) continued to slide lower to 57 from 60.8 the previous week, indicating the weekly relative strength is weakening and moving into the mildly bullish zone from the bullish zone. Daily RSI (14) was marginally lower at 46.7, indicating the daily relative strength is neutral with a bearish bias. Weekly Stochastic has slid lower to 80.1, indicating a possible continuation of the weekly down cycle. Daily Stochastic, however, continued to move higher to 26.5 after hitting the oversold level, indicating a technical rebound. Readings from the technical indicators showed that the momentum and market strength of the FBM KLCI is currently still weak, and the consolidation process may prolong.
The short term trend of the FBM KLCI remained down, as the key index remained below the 10, 20 and 30-day MAs. The key index will have to close above the 30-day Ma at 1,570-point level in order for the short term downtrend to reverse up. The medium and long term trend, however, remained up. Immediate overhead resistance zone is at 1,566 to 1,576, while the immediate downside support zone is at 1,560 to 1,552.
Last Friday, the Dow fell -43.25 points or -0.34% to close at 12,681.16. This week, the FBM KLCI is likely to trade within a range of 1,529 to 1,600, and for today it is likely to trade within a range of 1,558 to 1,571.
This week's expected range: 1529 – 1600
Today’s expected range: 1558 – 1571
Resistance: 1567, 1569, 1571
Support: 1558, 1560, 1562