FBM KLCI - lower on profit-taking
Stocks
on Bursa Malaysia closed lower yesterday weighed by profit-taking in
small caps and ACE Market amid losses in selected blue-chips. Bursa
Malaysia's weak performance was also contributed by selling in British
American Tobacco, the top loser for the day, which fell RM1.10 to RM67.
At close, the benchmark FBMKLCI fell 2.82 points or 0.15% to 1,825.11,
after hovering between 1,823.27 and 1,832.7 throughout the day. Losers
thumped gainers by 625 to 241, with 267 counters unchanged. Total volume
decreased to 2.25 billion shares worth RM1.86 billion from 2.66 billion
shares worth RM1.97 billion on Monday.Taking cue from the record close of the Dow overnight, the FBMKLCI opened 3.1 points higher at 1,831.03 and surged higher to hit the intra-day high of 1,832.70 twenty minutes after opening. However, the upward move was met with heavy profit-taking activity which sent the key index into the negative territory to hit the intra-day low of 1,823.27 at late afternoon before rebounding slightly to close off low. Chart-wise, the FBMKLCI formed a bearish dark-cloud-cover candlestick pattern which indicates heavy profit-taking activity. Hence, the FBMKLCI is likely to continue to consolidate today. Immediate downside support zone is at 1,823 to 1,819, while the overhead resistance zone is at 1,832 to 1,841.
MACD and its histogram continued to slide lower, indicating further loss in momentum. RSI (14) hooked downward to 47.4 from 48.8, indicating a mild pullback correction and the short term relative strength is still in the mildly bearish zone. Stochastic continued to slide lower to 48.7 from 59.6, indicating the key index is turning weaker for the short term, and continuation of the short term down cycle. Readings from the indicators showed that the FBMKLCI is weak and bearish for the short term, and hence, is likely to further consolidate.
The short term trend of the FBMKLCI remained down as the key index continued to stay below most of the short term moving averages. Nonetheless, yesterday’s bearish down move showed that the key index continued to find support at the 30 and 360-day simple moving average (SMA) as the index rebounded after testing the support zone of 1,823. At the meantime, the 1,823-point support also coincided with the 38.2% Fibonacci retracement support level, measuring from the pivot low of 1,766 to the pivot high of 1,858, which makes this support level especially important, and a break of this support level will likely see the FBMKLCI slipping lower to test the 20-day SMA support at 1,820 and the 50% Fibonacci retracement support at 1,812.
Overnight, the Dow rose a marginal 1.16 points or 0.01% to close at another record high of 17,614.90. Today, the FBMKLCI is likely to trade within a range of 1,811 to 1,842.
This week's expected range: 1778 – 1891
Today’s expected range: 1811 – 1842
Resistance: 1830, 1836, 1842
Support: 1811, 1817, 1821
Stocks to watch: ANCOMLB, AWC, EDUSPEC, INARI, JIANKUN, KEURO, KPS, M3TECH, OKA, RUBEREX, SALCON, TDEX, TROP
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Millionaire Trend Trader
http://www.harrisonho.com
