Bursa Malaysia reversed from its gains on Tuesday (Feb 14) to open lower on Wednesday morning due to profit taking, taking its cue from the choppy trading on Wall Street.
At 9.05am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) eased by 1.4 points to 1,482.57 from Tuesday’s close of 1,483.97.
The key index opened 1.17 points weaker at 1,482.8.
The FKLI accelerated its uptrend rebound yesterday, climbing 11 pts to close at 1,487.50 pts and reclaiming above the 50- and 200-day SMA lines. It opened neutral at 1,476.50 pts and, after briefly touching 1,475 pts, the index propelled northwards towards the end of the session – hitting the 1,489.50-pt high before the close.
RHB Retail Research said the three consecutive sessions of bullish candlesticks has solidified the recent rebound. Since the FKLI has crossed above the 50- and 200-day SMA lines, the technical set-up is in the midst of shifting towards bullish.
With the RSI indicator pointing at 51% – signalling a stronger momentum – we think the counter-trend rebound is likely to be extended.
Nevertheless, as long as the index stays below the Bearish Marubozu’s 1,493.50-pt high, the bears still have the technical advantage. The FKLI is likely to trade sideways in the coming sessions before propelling above the 1,493.50-pt immediate resistance. Unless the stop-loss is breached, we stick to our negative trading bias.
We advise traders to keep the short positions initiated at 1,474 pts or the closing level of 7 Feb. To minise the trading risks, the initial stop-loss threshold is fixed at 1,503 pts.
The immediate support is at 1,460 pts and followed by 1,435 pts or the low of 23 Nov 2022. The immediate resistance is pegged at 1,493.50 pts, which was the high of 7 Feb, and followed by 1,503 pts, ie the high of 1 Dec 2022.
