Bursa Malaysia is expected to trade in cautious mood, with the benchmark FBM KLCI index oscillating between the 1,380-1,410 range. Following the selldown, the local stock market is in oversold region. According to analysts, this would provide dip-buying opportunities for investors to accumulate stocks at attractive valuations.
The FBM KLCI opened at 1,383.50 as compared to last Friday’s closing at 1,382.47.
At the time of writing, the main index oscillated between 1,378.00 – 1,383.66 range.
Technical Analysis on KLCI Futures
RHB Research has maintained short positions on KLCI futures.
The FKLI rebounded strongly from Friday’s weak opening, as it managed to close 12 points stronger at 1,383.5 points – above the previous session’s high. The index opened significantly lower at 1,361.5 points but rebounded strongly as it headed northwards towards the end of the session to close in a positive tone, touching the 1,391.5-point high before retracing partially at the close. The latest “Bullish Engulfing” candlestick pattern may signal a potential initial rebound from the bottom. However, it has yet close above the 1,398-point resistance to negate the recent “Bearish Breakaway Gap” formed on 11 Oct – indicating that Friday’s rebound may not be seen as imminent and may be shortlived if it does not breach above the 1,398-point immediate resistance. Supported by i) low RSI at 33%, ii) “lower low” bearish pattern, and iii) it still trading below the 50 and 200-day SMA lines, we make no changes to our negative bias.
Traders should keep the short positions initiated at 1,384.50 pts, or the closing level of 12 Oct. To mitigate trading risks,
the stop-loss is set at 1,418 pts.
The immediate support is revised higher to 1,360.5 points, followed by 1,350 points. On the other hand, the immediate
resistance is unchanged at 1,398 points – 7 Oct’s low – followed by 1,418 points, or the high of 26 Sep.
