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Wednesday, December 9, 2009

Further downside for FBM KLCI


Stock prices on Bursa Malaysia continued to consolidate further yesterday. FBM KLCI opened in the positive territory but turned red soon after, and fluctuated in a very narrow trading range throughout the day. A last minute sell out of some key index link stocks push the benchmark index to close at the lowest point of the day at 1261.46, losing 3.9 points or 0.31%. Losers led gainers by 353 to 265, while 257 counters were unchanged. Volume traded was lower at 640 million shares, valued at RM828.9 million.

The price action of the FBM KLCI yesterday formed a bearish black candlestick which indicates a continuation of the current short term down trend. For the first time since June, the KLCI closed with a bearish black candle below the important 30 days moving average which had all these while supported the current uptrend, indicating there could be further downside to the key index.

MACD continued its slides indicating a picking up in downward momentum. RSI at 47.7 has just crossed below the bull-bear division level at 50. Stochastic too has just hook down below its 50 level. All these three indicators are indicating possible further downside for the FBM KLCI.

Today, the FBM KLCI is expected to trade within a range of 1250 to 1270

This week's expected range: 1230 – 1288
Today's expected range: 1250 – 1270

Resistance: 1265, 1267, 1270
Support: 1250, 1255, 1258

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