Trading on Bursa Malaysia was cautious at the opening on Monday (Feb 20), taking the cue from a mixed Wall Street performance last Friday.
At 9.11 am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) eased by 1.08 points to 1,475.82 from Friday’s close of 1,476.90, after opening 2.65 points weaker at 1,474.25.
Market breadth was negative with losers surpassing gainers 184 to 176, while 261 counters were unchanged, 1,607 untraded and 29 others suspended.
RHB Retail Research, in a note today (Feb 20) said the FKLI experienced strong profit taking last Friday, retreating 12.50 pts and closing lower at 1,476 pts – below both the 200-day and 50-day SMA lines.
Last Friday, the index began at the session’s high of 1,487.50 pts only to retrace lower until it hit the day’s low at 1,472 pts before closing in negative territory.
The latest bearish price action, coupled with the Shooting Star (formed on 16 Feb), affirm that the bears are still in control. In the event the bearish formation is extended, the index should print another “lower low” or retrace lower towards the 1,460- pt support.
The correction will continue until the formation of bullish reversal pattern emerges. Meanwhile, expect the 1,493.50-pt or the high of the Bearish Marubozu to act as a strong resistance now.
Since the bearish momentum is in play, we are keeping our negative trading bias unchanged. Traders are advised to retain the short positions initiated at 1,474 pts, or the closing level of 7 Feb.
To mitigate the trading risks, the initial stop-loss is placed at 1,503 pts. The immediate support is marked at 1,460 pts, followed by 1,435 pts, which was the low of 23 Nov 2022. Conversely, the immediate resistance remains at 1,493.50 pts (7 Feb’s high), followed by 1,503 pts (the high of 1 Dec 2022).
