Stocks on Bursa Malaysia posted modest gains at close yesterday,
ending a four-day losing streak amid lingering worries over Greece. Positive
sentiment overshadowed the concern over Europe’s debt crisis including
better-than-expected housing starts data in US and news that Japan’s economy
rebounded in the first quarter. The FBM KLCI finished 8.17 points or 0.53%
higher at 1,544.21 after moving between 1,536.24 and 1,552.25 throughout the
day. Market breadth was positive with 472 gainers and 279 losers while 327
counters were unchanged. Turnover declined to 1.27 billion shares worth RM1.93
billion from 1.33 billion shares valued at RM2.06 billion on Wednesday.
The FBM KLCI opened 0.2 point higher at 1,536.24, the low of
the day, and moved higher to hit the intra-day high of 1,552.25 right after
market opened in the afternoon session, making a gain of 16.21 points at its
best. However, profit-taking activity which emerged pressed the key index to
give back half of its gains to close off high. Chart-wise, the FBM KLCI formed
a white inverted hammer-like candlestick which indicates the bulls have decided
to fight back after four consecutive days of losses. However, the bears were
still around as can be seen from the pullback. The FBM KLCI may try to
consolidate around this level for the time being. Nevertheless, if the selling
pressures continue and the key index breaks below the 1,536-point level, it is
likely to slide lower to the 1,520 to 1,510 critical support zone.
MACD continued to slide lower and so is the histogram,
indicating a continuation in the bearish southward momentum. RSI (14) hooked
upward to 32.7 from 26.8, reflecting the rebound in the key index, and is still
in the bearish state. Stochastic was lower at 8.5, indicating a continuation of
the down cycle and the key index is very weak. Readings from the indicators showed that the
FBM KLCI is currently in a very weak and bearish state, the rebound seen
yesterday could merely be just a temporary relief as the overall technical
picture is still bearish.
The short and medium term trend of the FBM KLCI remained
down, while the longer term trend is at test now as the key index has pierced
through the 120-day SMA and rebounded, and is sitting right on it now. If the
selling pressures persist, then there is a high likelihood that the FBM KLCI
may plunge lower to the critical support zone provided by the long term moving
average clusters at 1,520 to 1,510. And a break below this support zone would
spell the beginning of a bear phase, and the FBM KLCI could be looking at
downside targets of 1,495, 1,460 and 1,424.
Overnight, the Dow fell -156.06 points or -1.24% to close at
12,442.49. Today, the FBM KLCI is likely to trade within a range of 1,520 to
1,569
This week's expected range: 1556 – 1610
Today’s expected range: 1520 – 1569
Resistance: 1553, 1561, 1569
Support: 1520, 1528, 1536
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