KLCI Undergoing Bearish Momentum

In the absence of fresh new leads, Bursa Malaysia is expected to trade in range-bound this week, with the main index FBM KLCI index set to gyrate between the 1,420 and 1,450 levels.

Investors are expected to remain cautious with dip-buying emerge whenever oversold condition is met. The weaker crude oil and commodity prices might continue to spook market sentiment.

There might be selective plays with the upcoming Budget 2023 for instance construction, renewables and EVs.

Technical Analysis on KLCI Futures

RHB Research has maintained short positions on KLCI futures as the bearish momentum accelerates.

The FKLI persisted with its selling momentum last Friday, inching 12.50 points lower to settle at 1,421 points and breaching the previous 1,433-point support. The index opened at 1,433.50 points to touch the day’s high of 1,438.50 points before falling strongly until the end of the session. It hit the day’s low of 1,418.50 points to close on a bearish tone. This third consecutive bearish candlestick amplifies the selling momentum beneath the 1,463-point resistance, and the FKLI looks set to fall lower towards the strong support level of 1,406.5 points, ie 14 Jul’s low. This is in line with our previous note, where the bearish bias should stay relevant as long as the index remains below the 1,493.50-point level or below the 50-day SMA line. As such, no change to bearish bias.

Traders are advised to remain in the short positions initiated at 1,462.50 points, which was the closing level of 14 Sep. To
manage the trading risks, the initial stop-loss threshold is fixed at 1,493.50 points.

The nearest support is at 1,406.50 points – the low of 14 July – and followed by 1,352.5 points, i.e. the low of 22 April. The
immediate resistance is still at 1,463 points – 20 September’s high – and followed by 1,493.50 points, which was the high of 12 September.

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