Stocks on Bursa Malaysia ended slightly lower Wednesday on mild profit-taking, mainly in financial counters after recent rally; losses were marginal as sentiment remained robust. The benchmark FBM KLCI index shed a marginal 1.49 points or 0.1% to 1472.95 after opening 1.73 points lower at 1472.71. Decliners outnumbered advancers by 416 to 299 while 301 counters were unchanged. Turnover dropped to 725 million shares worth RM1.436 billion from Tuesday’s 1.04 billion shares worth RM2.127 billion. Bursa Malaysia was closed for the Malaysia Day holiday yesterday.
The FBM KLCI opened 1.46 points lower at 1427.71 and traded in the negative territory throughout the day. It touched an intra-day low of 1469.86 before rebounding to close off-low at 1472.95 on last minute buying of selected heavyweights. Chart-wise, the benchmark index formed Doji candlestick, which indicates a pause to the up move or hesitation of the market to climb further after a substantial gain in two days; and the key index is expected to continue its correction and consolidation.
MACD continued to climb higher, as shown by its histogram, indicating strong upward momentum. RSI(14) at 84.9 has hooked downward, reflecting the correction. It is however, still in the seriously overbought zone. Stochastic at 99.3 is in the overbought zone, and continued to climb up further; indicating the short term up cycle remained intact. Signals from the indicators are indicating a very strong underlying uptrend, which is seriously overbought, and a correction is expected to bring down the overbought situation.
The underlying uptrend of the FBM KLCI remained very strong as indicated by the index staying above all the short, medium and long term moving averages that are all pointing northeast. The key index is expected to correct downward; however, it should be viewed as an opportunity to accumulate quality stocks at lower price level.
Overnight, the Dow rose +22.10 points or +0.21% higher to close at 10,594.83. Today, the FBM KLCI is likely to trade within a range of 1463 to 1478.
This week's expected range: 1412 – 1490
Today’s expected range: 1463 – 1478
Resistance: 1474, 1476, 1478
Support: 1463, 1468, 1470
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