Stocks on Bursa Malaysia finished on an easier note yesterday but recovered from the day’s low on better-than-expected November 2014 export data, and investors started nibbling at value buy selectively, but trading was still in cautious mode with global crude oil price bearishness still unresolved. The benchmark FBMKLCI eased 7.40 points, or 0.43%, dragged down by losses in selected blue chips, to close at 1,709.18, off the day’s low of 1,706.18. Gainers outpaced losers by 413 to 353 with 295 counters unchanged. Total volume fell slightly to 1.61 billion units worth RM2.1 billion from 1.64 billion units worth RM1.9 billion on Tuesday.
Following the bearish performance on Wall Street overnight, the FBMKLCI opened 1.88 points lower at 1,714.70 and slipped lower to hit the intra-day low of 1,706.18 at mid-morning. The key index rebounded from the low and climbed to hit the intra-day high of 1,717.17, making a marginal gain of 0.59 point, and it moved sideways range-bound throughout the afternoon session. However, a last minute selling dragged the key index to close lower. Chart-wise, the FBMKLCI formed a small black spinning-top-like candlestick which indicates consolidation with a downward bias. Hence, the FBMKLCI is likely to further consolidate today. Immediate downside support zone is at 1,706 to 1,700, while the overhead resistance zone is at 1,717 to 1,721.
MACD and its histogram continued to slide lower, indicating further loss in momentum. RSI (14) slipped lower to 36.8 from 38.5, indicating further loss of the short term relative strength in the bearish zone. Stochastic was lower at 49.6 from 64.3, breaking the 50-point level, indicating the key index was turning weaker and continuation of the down cycle. Readings from the indicators showed that the FBMKLCI is weak and bearish, and hence, is likely to further consolidate.
The trend of the FBMKLCI remained down and bearish as the key index continued to stay below the short medium and long term moving averages. Immediate downside critical support is at the 1,700-point psychological support level, and a break of this psychological support is likely to see the FBMKLCI sliding lower to re-test the critical pivot low of 1,671-point formed on December 17 2014.
However, the black spinning-top-like candlestick formed yesterday with a much smaller trading range of about ten points compared with the earlier two days’ candlesticks with a much larger trading range of twenty over points showed that selling pressure is reducing and a technical rebound might be expected ahead.
Overnight, the Dow rebounded 212.88 or 1.23% to close at 17,584.52. Today, the FBMKLCI is likely to trade within a range of 1,693 to 1,728.
This week's expected range: 1710 – 1799
Today’s expected range: 1693 – 1728
Resistance: 1715, 1721, 1728
Support: 1693, 1699, 1704
Stocks to watch: ABRIC, CENTURY, EVERGRN, FRONTKN, HEVEA, HOMERIZ, IFCAMSC, JAG, KAREX, LATITUD, LIIHEN, MIECO, MYEG, NTPM, OKA, SKPRES, SUNZEN, TMCLIFE, UNISEM, VS
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