FBM KLCI - down on continued selling pressure
Stocks
on Bursa Malaysia ended lower yesterday on selling pressure, sparked by
the continuous fall in oil prices, reduced demand and slower global
growth. Share prices retreated as investors remained on the sidelines
following news that the US Federal Reserve will start its two-day
monetary policy review later of the day. At close, the FBMKLCI fell
23.37 points or -1.38% to 1,673.94, after opening 8.57 points lower at
1,688.74. Losers trounced gainers by 572 to 296, while 275 counters were
unchanged. Total volume slipped to 1.64 billion units worth RM2.1
billion from 2.06 billion units worth RM2.32 billion on Monday.Tracking the weak performance of Wall Street overnight, the FBMKLCI opened 8.57 points lower at 1,688.74 and rebounded to touch the intra-day high of 1,693.91 within the first thirty minutes after opening. However, the rebound has no follow through, and the key index pulled back to move sideways range-bound for a major part of the day, and some last hour selling pressure dragged the key index to close at the lowest point of the day. Chart-wise, the FBMKLCI formed a bearish black candlestick with a downside runaway gap which indicates players are selling out in a panic situation. Hence, the FBMKLCI is likely to continue to slide lower today on continued selling pressure. Immediate downside zone support is at 1,660 to 1,650, where 1,660.39 is the critical pivot low formed on August 28th, 2013 and 1,650 is the psychological support level.
MACD and its histogram continued to slide southward, indicating an increased in the bearish momentum. RSI (14) slipped lower to 23.7 from 26.8, indicating the key index is very bearish. Stochastic plunged lower to 0.9 from 4.7, indicating extreme weakness and oversold of the key index, and a technical rebound might be expected. Readings from the indicators showed that the FBMKLCI is very bearish and is likely to further correct downward.
The trend of the FBMKLCI remained down and bearish as the key index continues to plunge. Judging from the bearish downward move yesterday, the FBMKLCI is likely to slide lower to test the critical pivot low support of 1,660.39 today, and a break of this critical support level will see the FBMKLCI plunging lower to the next lower support zone of 1,650 to 1,630, and if this support zone fails to hold, then the key index is likely to visit the 1,600-point psychological support level which coincides with the 50% Fibonacci retracement support level of 1,603 for the range measuring from the pivot low of 1,310.53 on September 26, 2011 to the historical high of 1,896.23.
Overnight, the Dow fell 111.97 or -0.65% to close at 17,068.87. Today, the FBMKLCI is likely to trade within a range of 1,647 to 1,713.
This week's expected range: 1685 – 1800
Today’s expected range: 1647 – 1713
Resistance: 1687, 1700, 1713
Support: 1647, 1660, 1667
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