Stocks on Bursa Malaysia closed slightly lower yesterday despite selling pressure on finance stocks, with losses countered by gains in selected heavyweight counters. Market talk on the possible scrap of the mega-bank merger of CIMB, RHB Cap and MBSB seemed to affect investors' buying pattern. At close, the benchmark FBMKLCI stood at 1,742.01, down 6.89 points, or 0.39%, after hovering between 1,736.77 and 1,744.71 throughout the day. Gainers outpaced losers by 450 to 349 with 308 counters unchanged. Total volume shed to 1.77 billion shares worth RM2.49 billion from 1.90 billion shares worth RM2.11 billion on Tuesday.
Following the weak performance on Wall Street overnight, the FBMKLCI opened 6.24 points lower at 1,742.66 and plunged lower in the first thirty minutes. The key index rebounded to hit the intra-day high of 1,744.71 at mid-morning, but again plunged lower to hit the intra-day low of 1,736.77, forming an intra-day double bottom chart pattern, and the FBMKLCI rebounded to move sideways range-bound for the rest of the day. Chart-wise, the FBMKLCI formed a Doji candlestick in Harami position which indicates a change in market sentiment from very bullish a day ago to a cautious and uncertain sentiment yesterday. Nonetheless, the longer lower shadow of the Doji formed yesterday showed that there were good support, and hence, the FBMKLCI is likely to stay sideways range-bound today. Immediate overhead resistance zone is at 1,744 to 1,750, while the immediate downside support zone is at 1,736 to 1,725.
MACD and its histogram continued to rise, indicating an increased in the upward momentum. Nevertheless, as MACD is still below the zero-line, the current uptrend may just be a technical rebound in a bear market. RSI (14) hooked downward slightly to 48.4 from 50.6, indicating a mild pullback correction. Stochastic rose to 55.7 from 50.7, indicating a continuation of the short term up cycle. Readings from the indicators showed that the FBMKLCI is in a state of pullback consolidation but with an upward bias.
The medium to long term trend of the FBMKLCI is still down. However, the short term trend of the FBMKLCI has turned sideways range-bound with a mild uptrend bias as the key index has closed below the 15-day simple moving averages (SMA), but is staying above other short term moving averages. Hence, the FBMKLCI is likely to stay sideways range-bound for the immediate term within a range of 1,706 to 1,770, and a breakout on either side of the range will see the key index continue moving in the breakout direction. On the broader market, rotational play has returned to the small caps and ACE market counters amid cautious trading.
Overnight, the Dow fell 186.59 points or -1.06% to close at 17,427.09. Today, the FBMKLCI is likely to trade within a range of 1,729 to 1,752.
This week's expected range: 1679 – 1785
Today’s expected range: 1729 – 1752
Resistance: 1745, 1749, 1752
Support: 1729, 1733, 1737
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