FBM KLCI - sign of bottoming
Stocks
on Bursa Malaysia ended on an easier note yesterday, with the benchmark
FBM KLCI down 9.88 points or 0.55% to 1,789.07 despite the
better-than-expected 2014 gross domestic product (GDP) growth.
Malaysia’s economy grew by 6% last year after recording a 5.8% growth in
the fourth quarter, mainly driven by private sector spending. The FBM
KLCI fluctuated between 1,780.21 and 1,791 throughout the day dragged
down by selling pressure in blue-chips led by TENAGA. Losers outpaced
gainers by 436 to 326, while 329 counters were unchanged. Total turnover
decreased to 1.68 billion units valued at RM2.51 billion from 2.2
billion units valued at RM2.4 billion transacted on Wednesday.The FBM KLCI opened lower with a downside gap of 8.26 points at 1,790.69 and rebounded to hit the intra-day high of 1,791.00 briefly after opening. However, the key index plunged to hit the intra-day low of 1,780.21 in the next forty minutes due to continued selling pressure in TENAGA. The FBM KLCI rebounded from the low and climbed higher gradually for the rest of the day to recover some of the lost ground. Chart-wise, the FBM KLCI formed a black hammer candlestick, a bottom reversal candlestick pattern, which indicates the bears were initially in control but were later took over by the bulls. Hence, the FBM KLCI is likely to stage further rebound today if the buying momentum continues. Immediate overhead resistance zone is at 1,791 to 1,812 with 1,800 being the strong psychological resistance, while the downside support is at 1,780.
MACD and its histogram continued to slide lower, indicating further increased in the bearish momentum. RSI (14) slipped lower to 53.3 from 57.8, indicating further loss in the index’s relative strength to the mildly bullish side. Stochastic plunged lower to 59.3 from 71.1, indicating further weakening of the key index and continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is losing its momentum and is likely to further consolidate.
The short term trend of the FBM KLCI has turned down with the bearish move over the last two days as the key index has now closed below the short term 5, 10 and 15-day simple moving average (SMA). Nonetheless, the FBM KLCI found some support at the 20-day SMA as it rebounded strongly from it after piercing through it briefly. The medium term trend is still sideways, while the long term trend is still down as the index has again closed below the 100 and 120-day SMA. Hence, the FBM KLCI is likely to stay in range-bound consolidation today.
Overnight, the Dow rose 110.24 points or 0.62% to close at 17,972.38. Today, the FBMKLCI is likely to trade within a range of 1,771 to 1,801.
This week's expected range: 1760 – 1866
Today’s expected range: 1771 – 1801
Resistance: 1793, 1797, 1801
Support: 1771, 1775, 1782
Stocks to watch : FGV, HEXZA, KOSSAN, MATRIX, MCLEAN, MITRA, MMCCORP, OWG, SERNKOU, VS, VSOLAR, YEELEE, YOKO
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