Stocks on Bursa Malaysia closed slightly lower yesterday dampened by selling in selected blue chips and heavyweights led by CIMB, in tandem with key Asian bourses. CIMB, which earlier announced that it would close its offices in Sydney and Melbourne, dragged the composite index lower by 1.746 points. At close, the benchmark FBM KLCI finished at 1,811.58, down 1.67 points or 0.09%, after fluctuating between 1,805.16 and 1,818.31 throughout the day. Losers outpaced gainers by 426 to 392, while 297 counters were unchanged. Total turnover fell to 2.12 billion units valued at RM1.94 billion from RM1.92 billion units valued at RM2.14 billion transacted on Friday.
The FBM KLCI opened 2.37 points higher at 1,815.62 and surged to hit the intra-day high of 1,818.31 three minutes after opening. However, heavy profit-taking activity which emerged pushed the key index to hit the intra-day low of 1,805.16 in the next fifteen minutes. The FBM KLCI rebounded from the low and moved sideways range-bound for the rest of the day to cover much of the early losses. Chart-wise, the FBM KLCI formed a bearish black hanging-man candlestick in dark-cloud-cover position indicating profit-taking correction after a strong upward move on last Friday. Hence, the FBM KLCI is likely to further consolidate today. Immediate overhead resistance zone is at 1,818 to 1,831, while the downside support zone is at 1,805 to 1,796.
MACD continued to climb higher but its histogram contracted downward, indicating a state of consolidation. RSI (14) hooked downward slightly to 64.3 from 65.1, indicating a mild pullback correction and the FBM KLCI is still in the bullish zone. Stochastic was marginally high at 76.7 from 74.8, indicating consolidation and the short term cycle is still up. Mixed signals from the indicators showed that the FBM KLCI is in a correction mode.
The short term trend of the FBM KLCI is up as the key index continued to stay above the 5, 10, 20 and 30-day simple moving averages (SMA). The medium term trend is sideways as the 50 and 60-day SMA have turned flat, while the longer term trend is still down as the FBM KLCI continued to stay below the cluster of longer term moving averages, i.e. the 150, 200, 240, 300 and 360-day SMA. Nevertheless, it is important to note that the FBM KLCI has closed above the 100 and 120-day SMA, showing early sign that the key index is gradually turning bullish for the long term. However, in order for the key index to turn bullish, it will have to break through the immediate long term moving average resistance zone at 1.821 to 1,833, where 1,833-point is the uppermost resistance posted by the 200 and 240-day SMA.
Overnight, the Dow fell 95.08 points or -0.53% to close at 17,729.21. Today, the FBMKLCI is likely to trade within a range of 1,791 to 1,831.
This week's expected range: 1760 – 1866
Today’s expected range: 1791 – 1831
Resistance: 1818, 1825, 1831
Support: 1791, 1798, 1805
Stocks to watch: ALAM, ASUPREM, BARAKAH, CAB, DIALOG, DRBHCOM, DUTALND, EDUSPEC, EVERGRN, HOVID, ICON, KSL, LONBISC, MIECO, PERISAI, RGB, SCH, SILKHLDG, THHEAVY, TMCLIFE
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