Bursa Malaysia rebounded from its 2-year low with the FBM KLCI opened at 1,381.63 as compared to Thursday’s closing of 1,373.36. At the time of writing, it fluctuated between 1,381.34 – 1,385.44.
The main index rebounded when it hit a new year-to-date (YTD) low yesterday.
Technical Analysis on KLCI Futures (FKLI)
RHB Research has retained its short positions on FKLI.
The FKLI extended its downward movement, shedding 5 points to close at 1,371.50 points – a level last seen on 13 May 2020. The index started Thursday’s session at 1,376 points. It rebounded to test the 1,380-point intraday high, but failed to sustain the positive momentum. It then reversed to the day’s low of 1,369 points and closed in negative territory, printing a fresh “lower low”. The latest bearish candlestick affirms that negative momentum is accelerating, and the index should soon travel towards 1,350 points. As mentioned in our previous note, the 50-day SMA line is trending lower. This, coupled with the negative price action, shows that the bears are now at maximum strength. Any attempt to stage a technical rebound would be met with strong resistance at 1,398 points. As the bears are now fully in charge, no change to negative bias.
Traders should keep the short positions initiated at 1,384.50 points, or the closing level of 12 October. To mitigate trading risks, the stop-loss is placed at 1,418 points.
The immediate support is marked at 1,350 points, followed by 1,320 points. On the other hand, the immediate resistance is
pegged at 1,398 points – 7 October’s low – followed by 1,418 points, or the high of 26 September.