Stocks on Bursa Malaysia ended broadly lower across the board yesterday in tandem with weak regional markets following sharp losses on Wall Street and in European markets overnight. The FBM KLCI fell as much as 18 points at the open but gradually regained lost ground as the day progressed to close 7.24 points or 0.54% lower at 1335.69. Losers outpaced gainers by 531 to 193 while 257 counters were unchanged. Volume traded was higher at 861 million shares worth RM1.522 billion.
Chart wise, the FBM KLCI formed a white candlestick despite closing 7 points lower from previous day’s close, which indicates buyers were dominant in buying up blue-chip shares which pushed the key index 10 points up from the day’s low to close near the day’s high. The benchmark index has also managed to close above the 1330 critical short term support level and the 30-day moving average (MA) when it close at 1335.65, hence, the short term uptrend remained intact. It is however, below the 5 and 10-days MA, and these two MAs which now lie at 1340 will form the overhead resistance to the upside.
MACD slide lower which indicates the increase in downward momentum. RSI(14) at 52.79 slide lower into the neutral zone. Stochastic at 73 has crossed below its slow Stochastic decisively, and this probably marks the beginning of a short term down cycle of the FBM KLCI.
As the FBM KLCI is now below its short term 5 and 10-day MAs but above the 30-day MA, it may probably goes into a sideway mode bouncing between 1330 and 1340 provided that it can hold well above the 1330 level. The 1324 level has also become an important support level to watch as it has shown good support twice at this level over the last six days. The underlying medium and longer term trend, however, still remained up.
In view of the still unsettled Euro Zone debt problems and concerns over the impact of China’s credit tightening measures, the market may continue to stay volatile in the short term. However, improve economic data and corporate results may help to buffer the negative impacts.
Today, the FBM KLCI is likely to trade within a range of 1316 to 1348
This week's expected range: 1307 – 1372
Today’s expected range: 1316 – 1348
Resistance: 1340, 1344, 1348
Support: 1316, 1321, 1328
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