FBM KLCI - lower on profit-taking correction
Stocks
on Bursa Malaysia ended easier yesterday after closing higher on a
technical rebound on Wednesday, in line with Asian markets which sank
again after Wall Street was hit by a further fall in oil prices, while
the dollar edged up after tumbling against the yen. The benchmark
FBMKLCI fell 20.95 points or 1.19% to 1,744.57, after opening 17.35
points lower at 1,748.17. Losers trounced gainers by 626 to 178, while
243 counters were unchanged. Total volume slipped to 1.2 billion units
worth RM1.5 billion from 1.2 billion units worth RM1.6 billion on
Wednesday.Following the decline on Wall Street which saw 268 points losses of the Dow overnight, the FBMKLCI opened 17.35 points lower at 1,748.17 and plunged to the intra-day low of 1,742.35 within the first ten minutes after opening. The key index rebounded from the low and climbed higher gradually to hit the intra-day high of 1,759.19 at lunch break. However, profit-taking activity which emerged in the afternoon dragged the key index to close off high. Chart-wise, the FBMKLCI formed a black inverted hammer candlestick in bearish Harami position, indicating a change in the market sentiment to bearish from bullish a day ago. Hence, the FBMKLCI is likely to further consolidate today. Immediate overhead resistance zone is at 1,757 to 1,765, while the downside support zone is at 1,742 to 1,730.
MACD hooked downward after turning up a day ago, while its histogram continued to contract upward for a second bar, indicating a state of consolidation. RSI (14) hooked downward to 35.2 from 40.2, indicating a pullback correction and the short term relative strength of the key index has returned to a bearish state. Stochastic was higher at 16.2 from 13.8, indicating a continuation of the up short term cycle. Readings from the indicators showed that the FBMKLCI is in a state of consolidation, and is likely to further consolidate.
The trend of the FBMKLCI remained down and bearish. The key index has again gone back into consolidation mode with yesterday’s pullback correction after a strong surge on Wednesday. Hence, the FBMKLCI is likely to stay in range-bound consolidation today within an immediate range of 1,730 to 1,765. However, a further break of the downside support at 1,730 will see the key index plunging to the 1,725 to 1,716 support zone.
Overnight, the Dow rose 63.19 or 0.36% to close at 17,596.34. Today, the FBMKLCI is likely to trade within a range of 1,724 to 1,772.
This week's expected range: 1689 – 1851
Today’s expected range: 1724 – 1772
Resistance: 1753, 1762, 1772
Support: 1724, 1733, 1738
Stocks to watch: HARTA, KOSSAN, MAA, PBA, PRDUREN, WPRTS
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