Stocks on Bursa Malaysia closed mostly higher yesterday with main indices staying in positive territory despite weaker sentiments in Asian markets. Investors were concerned over the weakening global economic outlook following poor economic data from US and persistent Europe’s sovereign debt crisis. The benchmark FBM KLCI closed 1.79 points or 0.12% higher at 1,546.89. Gainers outnumbered losers by 397 to 363 while 316 counters were unchanged. Turnover decreased to 1.161 billion shares worth RM1.545 billion from 1.165 billion shares worth RM1.750 billion on Wednesday.
The FBM KLCI opened 1.77 points higher and continued its upward move to hit the intra-day high of 1,552.91 in the first hour of trade, and moved sideways for the rest of the morning session. Heavy profit-taking emerged in the afternoon pushed the key index to the negative territory, hitting a low of 1,545.69 before recovering slightly to close in the positive zone. Chart-wise, the FBM KLCI formed a Doji candlestick with long upper shadow, which indicates buyers were initially bullish in pushing up stocks, but was later met with heavy selling pressure, and the appearance of Doji indicates indecision of market direction. The FBM KLCI may continue to consolidate further.
MACD continued to slide lower, indicating an increased in the downward momentum. RSI (14) hooked up slightly to 38.7, indicating the key index is still in the bearish zone. Stochastic is at 20.9, has hooked downward and crossed below its slow stochastic line, indicating a reversal of the short rebound to continue with the down cycle. Readings from the indicators showed that the FBM KLCI is currently bearish and weak, and is likely to continue with its consolidation.
The short term trend of the FBM KLCI remained down, while the medium term trend has turned sideways, and the long term trend is still up. The long term uptrend maybe subjected to challenge soon, as the index is now very close to the 120 and 150-day moving average (MA), which is currently at 1,540-point level. A breach of this critical immediate support level will see the key index sliding lower to the 200-day MA at 1,530-point level, which is an extremely critical support level to watch.
Overnight, the Dow fell -512.76 points or -4.31% to close at 11,383.68. Today, the FBM KLCI is likely to trade within a range of 1,534 to 1,560.
This week's expected range: 1520 – 1586
Today’s expected range: 1534 – 1560
Resistance: 1551, 1556, 1560
Support: 1534, 1541, 1544