FBM KLCI - lower on continued selling pressure
Stocks
on Bursa Malaysia ended lower yesterday on continued profit-taking as
investors feared that a downtrend in the local market was still present,
as Monday’s selling which focused on oil and gas counters had shifted
to banks on Wednesday, also to a more broad-based selling yesterday. At
close, the FBMKLCI stood at 1,745.69, down 12.46 points or 0.71%, after
opening 2.1 points higher at 1,760.25. The benchmark index moved between
1,743.62 and 1,768.81 throughout the day. Losers trounced gainers by
519 to 286, while 309 counters were unchanged. Total volume increased to
1.88 billion units worth RM2.25 billion from 1.56 billion units worth
RM1.97 billion on Wednesday.Taking cue from the record close of the Dow overnight, the FBMKLCI opened 2.1 points higher at 1,760.25 and climbed to the intra-day high of 1,768.81 thirty five minutes after opening. However, the rebound could not sustain and the key index slipped lower on heavy profit-taking activity which sent the key index to the intra-day low of 1,743.62 at late morning before rebounding to move sideways. Chart-wise, the FBMKLCI formed a bearish black candlestick with a long upper shadow which indicates sellers were dominant for the day. Hence, the FBMKLCI is likely to slip lower today on continued selling pressure. Immediate downside support zone is at 1,743 to 1,732, while the overhead resistance zone is at 1,750 to 1,768.
MACD and its histogram continued to slide lower, indicating an increased in the bearish momentum. RSI (14) was lower at 28.5 from 30.8, indicating a very bearish state of the key index and is entering the oversold zone. Stochastic was lower at 9 from 13.1, indicating oversold, very weak index strength and continuation of the down cycle. Readings from the indicators showed that the FBMKLCI is very weak and bearish, and hence, is likely to further consolidate.
The technical picture of the FBMKLCI still remained bearish and down as the key index continues to stay below the short, medium and long term moving averages. With the continued sell-down yesterday and the breaking of the 600-day simple moving average support at 1,761, and the 1,750-point psychological support as well as the 61.8% Fibonacci retracement support, the key index is poised to slide lower to the next lower support zone of 1,737 to 1,730, follow by the 76.4% Fibonacci retracement support level at 1,716-point level.
Overnight, the Dow fell 12.52 or -0.07% to close at 17,900.10. Today, the FBMKLCI is likely to trade within a range of 1,711 to 1,794.
This week's expected range: 1768 – 1881
Today’s expected range: 1711 – 1794
Resistance: 1761, 1778, 1794
Support: 1711, 1727, 1736
Stocks to watch: BRAHIMS, KOSSAN, NIHSIN, PENTA, PESONA, UNISEM
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