FBM KLCI extends consolidation

SHARES on Bursa Malaysia fell across the board yesterday, in tandem with weaknesses on Wall Street and regional stock markets. The market closed lower for the fourth consecutive week ended yesterday.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) posted a week-on-week loss of 24.38 points, or 1.57 per cent, for the week ended yesterday. It continued to stay above its critical support of 1,520 when it closed at 1,524.43 points .

On Monday, the index opened at 1,549.79, before hitting a day high of 1,558.49. It closed at 1,558.01 points, giving a day-on-day gain of 9.20 points, or 0.59 per cent.

Shares consolidated on Tuesday, moving in step with regional stock markets. The FBM KLCI trended between the day low of 1,553.39 and day high of 1,558.84. It closed at 1,554.85 points, giving a day-on-day loss of 3.16 points, or 0.20 per cent.

The FBM KLCI continued to consolidate further when it moved in step with technical pullbacks on Wall Street, Hong Kong and Tokyo stock markets on Wednesday. It trended from its day high of 1,554.49, to its day low of 1,538.95.

It closed at 1,545.10 points, giving a day-on-day loss of 9.75 points, or 0.63 per cent.

Overall market sentiment remained weak on Thursday. It trended from its day low of 1,545.69 to its day high of 1,552.91. It ended the day at 1,546.89 points, giving a day-on-day loss of 1.79 points, or 0.12 per cent.

The FBM KLCI staged a sharp technical pullback yesterday. It trended between its day low of 1,509.37 to its day high of 1,529.94 before closing at 1,524.43 points , posting a day-on-day loss of 22.46 points, or 1.45 per cent.

The FBM KLCI staged a follow-through consolidation for the fourth consecutive week to close at 1,524.43 yesterday, giving a week-on-week loss of 24.38 points.

The FTSE Bursa Malaysia Small Cap Index lost 340.14 points, or 2.72 per cent, to close at 12,171.13 points while the FTSE Bursa Malaysia ACE Index fell 71.78 points, or 1.74 per cent, to 4,050.02 level yesterday.

Following are the readings of some of the FBM KLCI's technical indicators:

Moving Averages: The FBM KLCI fell through the support of all of its 10-, 20-, 30-, 50-, 100- and 200-day moving averages.

Momentum Index: Its short-term momentum index continued to trend below its neutral reference line at the market close yesterday.

On Balance Volume: Its short-term OBV trend stayed below the support of its 10-day exponential moving averages.

Relative Strength Index: Its 14-day RSI stood at the 28.60 per cent level yesterday.

Outlook

The FBM KLCI hit its intra-week high of 1,558.84 on Monday, moving into the confines of this column's envisaged resistance zone (1,553 to 1,587 levels).

Subsequent technical pullbacks sent the FBM KLCI to the week's low of 1,509.37 yesterday, staging a re-test of the confines of this column's envisaged support zone (1,511 to 1,545 levels).

A quick review of the performances of the FBM KLCI's 30 components shows that losers continued to outpace gainers by 26 to 3. BAT, Petdag, MISC and HLFG's combined losses of RM1.08, 64-sen, 45-sen and 40-sen respectively accounted for the bulk of the FBM KLCI's week-on-week loss of 24.38 points, or 1.57 per cent.

Petronas Dagangan Bhd (Petdag) remained as the week's top performing component to-date with a total year-to-date gain of RM5.50, or 47.01 per cent.

The FBM KLCI's weekly charts continued to stay below the support of its intermediate-term uptrend (See FBM KLCI's weekly chart - A3:A4) during the week. It breached the support of its immediate downside support (A1:A2) yesterday.

Chartwise, the FBM KLCI's had since stayed below the support of its intermediate-term uptrend (See FBM KLCI's daily chart - B1:B2) over the week. It breached its immediate support (B3:B4) yesterday. The FBM KLCI closed at 1,524.43 points yesterday.

The FBM KLCI's daily, weekly and monthly fast MACDs (moving average convergence divergence) had since stayed below their respective slow MACDs yesterday. With that, the FBM KLCI will now move into its mid-term consolidation mood.

The FBM KLCI's 14-day RSI stayed at 28.60 per cent level yesterday. Its 14-week and 14-month RSI stayed at 46.23 and 64.83 levels respectively.

The FBM KLCI consolidated over three of its five trading days.

Last week, this column commented that the FBM KLCI's 30 components would continue to consolidate further. It did. The FBM KLCI closed 24.38 points, or 1.57 per cent lower, at 1,524.43 points yesterday.

Following the sharp technical pullback , the FBM KLCI had since trended below the support of its 200-day moving averages. With that, it suggests that the overall market sentiment is set in its mid-term consolidation.

Next week, the FBM KLCI's envisaged resistance zone is at the 1,528 to 1,562 levels while its immediate downside support is at the 1,487 to 1,521 levels.