FBM KLCI Skidded at Opening After US Stocks Tumbled

Taking negative cue of Wall Street performance overnight, Bursa Malaysia slid at the opening with the FBM KLCI declined almost 6 points at 1,461.76 as compared to yesterday’s close of 1,467.13.

At press time, the main index was traded in the range of 1,460.64 – 1,461.76.

On Thursday, both Dow Jones and Nasdaq closed sharply lower, as worries for a recession heightened as the Federal Reserve’s hawkish stance by hiking interest rates would only kill consumption and investment.

Technical Analysis on KLCI Futures (FKLI)

RHB Retail Research has reiterated its long positions on FKLI.

Yesterday, the FKLI reversed Wednesday’s positive momentum as it fell 19 points to close at
1,465 points – lower than Wednesday’s low – heading towards the 1,459-point immediate support. It opened at 1,483 points, touching the 1,486-point high and then fell sharply towards the end of the session to hit the day’s low at 1,465 points before the close.

The strong negative momentum suggests a high possibility for the selling pressure to push the index below the consolidation phase of 1,459 points support before heading towards the 50-day SMA line level. This weakening of the momentum is also supported by the RSI’s descend towards below the 50% level.

The bearish bias would emerge if it falls below the support level, forming a “lower low” bearish pattern. Until the 1,459-point support is breached, we stick to a bullish bias.

Traders remain in the long positions initiated at 1,475.50 points (11 Nov’s close). To manage the trading risks, the stop-loss is set at 1,459 points.

The immediate support is pegged at 1,459 points – 29 Nov’s low – followed by 1,445 points. Towards the upside, the immediate resistance is unchanged at 1,485 points – 25 Nov’s low – followed by 1,517.5 points, which was the high of 25 Nov.

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