Stocks on Bursa Malaysia closed mixed yesterday with the benchmark FBM KLCI easing 3.2 points or 0.18% to close at 1,750.11, dragged down by losses in selected blue-chips. The benchmark index moved between 1,745.64 and 1,754.34 throughout the day. Gainers led losers by 418 to 391, while 289 counters remained unchanged. Total volume rose to 2.05 billion shares worth RM2.02 billion from 1.9 billion shares worth RM1.9 billion on Monday.
The FBM KLCI opened 0.9 of a point higher at 1,754.21 and surged to hit the intra-day high of 1,754.34 briefly after opening. However, the upward move found no follow through and the key index came under selling pressure and slipped lower to hit the intra-day low of 1,745.64 at mid-morning. The FBM KLCI rebounded from the low and moved sideways range-bound for the rest of the day to close off low. Chart-wise, the FBM KLCI formed a bearish black hanging-man in dark-cloud-cover position, a top reversal candlestick pattern which indicates profit-taking, and the candlestick was contained within the previous day’s candlestick. Hence, the FBM KLCI is likely to further consolidate or correct downward today. Immediate downside support zone is at 1,745 to 1,732, while the overhead resistance zone is at 1,754 to 1,759.
MACD continued to climb higher, but its histogram turned flat, indicating a reduction in the upward momentum or consolidation. RSI (14) hooked downward to 51.2 from 52.5, indicating a mild pullback correction. Stochastic was higher at 67.1 from 63.9, indicating continuation of the short term up cycle. Mixed readings from the indicators showed that the FBM KLCI is moving into a consolidation mode.
The technical picture of the FBM KLCI still remained unchanged in that the medium and long term trend is still down, while the short term trend has turned sideways range-bound. For the immediate near term, the FBM KLCI has a mild upward bias as the key index continued to stay above the short term moving averages. However, the price action yesterday and the candlestick formed indicated that the FBM KLCI is likely to go into a sideways range-bound consolidation. Nevertheless, on the broader market, rotational play on the small caps and ACE market counters continues to present trading opportunities, and for the longer term investors, it is perhaps time to accumulate quality shares that were beaten down for longer term gains.
Overnight, the Dow rose 3.66 points or 0.02% to close at 17,515.23. Today, the FBMKLCI is likely to trade within a range of 1,737 to 1,763.
This week's expected range: 1692 – 1783
Today’s expected range: 1737 – 1763
Resistance: 1754, 1758, 1763
Support: 1737, 1741 1745
Stocks to watch: ASIABIO, BAHVEST, COMCORP, ETITECH, GOB, GTRONIC, IFCAMSC, IWCITY, LIONDIV, MAYBULK, MITRA, MYEG, NIHSIN, PRLEXUS, SEALINK, SYSTECH, TNLOGIS, WTK
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