Stocks on Bursa Malaysia closed mixed yesterday with the FBM KLCI fell marginally reversing its earlier gains to close slightly lower on late selling, mostly in selected blue chips and the weakening of the ringgit, in line with Asian markets, after China's consumer inflation touched a five-year low in January, fuelling disinflation concerns. At close, the FBM KLCI fell 0.46 points or 0.03% to settle at 1,811.12 points after fluctuating between 1,808.69 and 1,816.62 throughout the day. Gainers outpaced losers by 434 to 373, while 324 counters were unchanged. Total turnover increased to 2.5 billion units valued at RM2.3 billion from 2.1 billion units valued at RM1.9 billion on Monday.
The FBM KLCI opened 1.16 points higher at 1,812.74 and slipped lower to hit the intra-day low of 1,808.69 twenty five minutes after opening. The FBM KLCI rebounded from its low and climbed higher gradually for a major part of the day to hit the intra-day high of 1,816.62 before late profit-taking pushed it to close marginally lower. The key index was moving within the range of previous day. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates uncertainty of market direction and consolidation. Hence, the FBM KLCI is likely to further consolidate today within a range of 1,805 to 1,818.
MACD was marginally higher, while its histogram further contracted downward, indicating further loss in momentum and consolidation. RSI (14) slipped marginally lower to 64.1 from 64.3, indicating mild correction and the short term relative strength is still in a bullish state. Stochastic was slightly higher at 78.5 from 76.7, indicating the short term up cycle is still intact. Readings from the indicators showed that the FBM KLCI is in a state of consolidation.
The technical picture of the FBM KLCI still remained very much unchanged in that the short term trend is up, and the medium term trend has turned sideways to up, while the long term trend is still down as the key index continued stay below a cluster of long term moving averages. Nevertheless, it is important to note that the FBM KLCI has closed above the 100 and 120-day SMA but is capped on top by a cluster of long term moving averages with immediate resistance posted by the 150-day SMA at 1,819, follow by the 360-day SMA at 1,822, and the uppermost moving average resistance at 1,833 by the 240-day SMA. A breakthrough of the long term moving average resistance zone will see the FBM KLCI turning bullish and rally higher to the 1,845 to 1,858-point level.
Overnight, the Dow rose 139.55 points or 0.79% to close at 17,868.76. Today, the FBMKLCI is likely to trade within a range of 1,799 to 1,824.
This week's expected range: 1760 – 1866
Today’s expected range: 1799 – 1824
Resistance: 1815, 1820, 1824
Support: 1799, 1804, 1807
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