The FBM KLCI opened at 1,388.28 as compared to yesterday’s closing of 1,386.82.
The main index oscillated between 1,387.93 – 1,391.47 at the time of writing.
According to Rakuten Trade, the FBM KLCI is trading at less than 12x PE, almost 40% less than its five-year historical average (18.4 times PE). This translates to very attractive valuation. The market is believed to be bottomed out, barring any unforeseen crisis. Hence, there will be strong support at this level.
Technical Analysis on FKLI
Stop-loss mark triggered; RHB Research has initiated short positions on KLCI Futures (FKLI)
The FKLI opened significantly lower and fell sharply towards the 1,380-point support yesterday as it settled 16 points down at 1,384.50 points – crossing below the 1,388-point stop-loss. The benchmark index opened lower with a gap at 1,393 points and fell further down throughout the session as it hit the 1,380.50-point low before rebounding mildly towards the close. The second consecutive black body candlestick with a “Bearish Breakaway Gap” indicates that the recent weaken bullish movement has turned bearish. At this point, we believe the FKLI may fall further below the 1,380-point support in later sessions. Nevertheless, we expect the index to trade in a sideways direction near the 1,380-point support in the immediate session before resuming the selling momentum. Since the stop-loss mark was triggered, RHB Reseach has just shifted to a bearish bias.
The research house has just closed its long positions initiated at 1,421 points – the closing level of 5 Oct – after the 1,388-point stop-loss was triggered. Conversely, we initiate short positions at the closing level of 12 Oct, ie 1,384.50 points. To manage the trading risks, the initial stop-loss threshold is set at 1,418 points, which was 26 September’s high.
The immediate support is revised to 1,380 points – the low of 3 October – and followed by 1,350 points. The immediate resistance is set at 1,418 points – 26 September’s high – and followed by 1,443 points, ie 22 September’s high.
