FBM KLCI - lower on continued foreign selling

FBM KLCI - lower on continued foreign selling

Stocks on Bursa Malaysia ended lower yesterday on persistent selling by foreign funds, and some selling were triggered by downgrades by certain research houses which gave ‘underperform’ ratings to selective counters. The sell-down was concentrated in the banking sector and selective oil and gas-linked stocks. The FBMKLCI fell 27.82 points or 1.56% to close at 1,758.15, after opening 2.18 points higher at 1,788.15. The benchmark index moved between 1,758.15 and 1,789.04 throughout the day. Losers led gainers by 678 to 197, while 250 counters were unchanged. Total volume slipped to 1.56 billion units worth RM1.97 billion from 2.16 billion units worth RM2.18 billion on Tuesday.

Taking cue from the record close of the Dow overnight, the FBMKLCI opened 2.18 points higher at 1,788.15 and surged to hit the intra-day high of 1,789.04 briefly after opening. However, the upward move found no follow through, and the key index plunged lower on heavy selling pressure for the rest of the day to end at the lowest point of the day. Chart-wise, the FBMKLCI formed a bearish engulfing candlestick pattern which indicates the bears have re-emerged in driving the key index lower. Hence, the FBMKLCI is likely to slip lower today on continued selling pressure. Immediate downside support is expected at 1,850, 1,747 and 1,738, while the overhead resistance zone is at 1,763 to 1,789.

MACD and its histogram continued to slide southward, indicating an increased in the bearish momentum. RSI (14) slipped lower to 30.8 from 37.2, indicating the key index has turned more bearish. Stochastic was lower at 13.1 from 23.9, entering the oversold zone, indicating further weakening of the key index and continuation of the down cycle. Readings from the indicators showed that the FBMKLCI is weak and bearish, and is likely to slip lower.

The trend of the FBMKLCI is down and bearish as the key index continued to stay below the short, medium and long term moving averages. With the breakdown of the pivot support of 1,766.22 and the 500-day SMA yesterday, the FBMKLCI is likely to extend its current downtrend with downside target of 1,750-point, follow by the 1,716-point level, being the 61.8% and 76.4% Fibonacci retracement support level for the range measured from the August 28th 2013 low of 1,660.39 to the 1,896.23 record high.

Overnight, the Dow rose 33.07 or 0.18% to close at a fresh record of 17,912.62. Today, the FBMKLCI is likely to trade within a range of 1,716 to 1,819.

This week's expected range: 1768 – 1881
Today’s expected range: 1716 – 1819

Resistance: 1778, 1799, 1819
Support: 1716, 1737, 1747

Stocks to watch: KOSSAN, UNISEM, WPRTS

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

http://millionairetrendtrader.blogspot.com/