KLCI to Resume Sideways Movement

Bursa Malaysia opened lower at 9am, the FBM KLCI started the day at 1407.32 point. The KLCI range between 1,404.09 – 1,409.13.

At the time of writing, the KLCI was down 4.77 points or 0.34% at 1,406.10.

Technical Analysis on KLCI Futures

With the downward pressure still persists, RHB Research has maintained “short” positions on KLCI futures.

The FKLI moved sideways to close neutral at 1,413.5 points – hovering near the strong support level of 1,406.5 points. The index opened at 1,412 points and oscillated moderately between the low of 1,406 points and high of 1,418.5 points to close just above the opening level. The neutral movement following the recent sharp sell down implies that the strong selling pressure has paused at the support level – this is in line with our earlier expectation of the sideways movement likely to occur in the coming sessions before the strong selling momentum follows through to resume the downward movement. The continuous weakening of the RSI below the 30% level does not signal any divergence for a potential rebound to occur. As such, no change to its bearish bias.

Traders should remain in the short positions initiated at 1,462.50 points, which was the closing level of 14 September. 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 – followed by 1,352.5 points, i.e. the low of 22 April. The
immediate resistance is still at 1,463 points – 20 Sep’s high – followed by 1,493.50 points, which was the high of 12 September.

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