Stocks on Bursa Malaysia ended mixed yesterday with investor interest confined to selective sectors and stocks, including telecommunication and plantation counters. The market was concerned over progress in the plan to lift the US debt ceiling that has triggered a broad sell-off in risky assets worldwide. The FBM KLCI fell 3.6 points, or 0.23%, to 1,558.17. Market breadth was positive with advancers leading decliners by 383 to 320 while 343 counters closed unchanged. Volume rose to 1.05 billion shares worth RM1.7 billion from 1.04 billion shares valued at RM1.54 billion on Tuesday.
The FBM KLCI opened 0.18 point firmer at 1,561.95 but was sold down to the intra-day low of 1,557.26 within the first ten minutes. It rebounded and touched the intra-day high of 1,565.00 before late sell off which sent the key index to close near the low of the day. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which is a reversal pattern. The price action of the key index indicates that it is likely to continue with its current downtrend and consolidation. It is likely to test the medium term 60-day MA support which is currently at 1,556-point, a break below this level is likely to see the key index sliding lower to test the psychological support level of 1.550.
MACD continued to slide lower into the negative zone, but the histogram is shorter upward, indicating the downward momentum is slowing down, reflecting the current consolidation mode. RSI (14) is lower at 42.3, indicating the short term relative strength of the key index is getting more bearish. Stochastic is at 16.1, and has fallen back to the oversold zone which indicates weak market strength and the down cycle is likely to continue. Readings from the indicators showed that the FBM KLCI is currently very weak and bearish, and the consolidation process is likely to continue.
The short term trend of the FBM KLCI remained down, while the medium term uptrend is at test. Nonetheless, the long term trend is still up. Immediate downside support zone is at 1,556 to 1,550, and a break below the 1,550-point level is likely to see the key index slide toward the 120-day MA support at 1,538. Overhead resistance zone is at 1,558 to 1,570.
Overnight, the Dow fell -198.75 points or -1.59% to close at 12,302.55. Today, the FBM KLCI is likely to trade within a range of 1,547 to 1,572.
This week's expected range: 1529 – 1600
Today’s expected range: 1547 – 1572
Resistance: 1563, 1568, 1572
Support: 1547, 1552, 1555
Stocks to watch: AIRASIA, SCABLE, SOP, TDM, KULIM-WC, TM,