The Malaysia stock market has moved lower in three straight sessions, sinking more than 25 points or 1.8 percent along the way. The Kuala Lumpur Composite Index now rests just beneath the 1,435-point plateau and the losses may accelerate on Monday.
At 9.13am, the bellwether index opened lower at 1,419.42, -13.66 points lower than Friday’s (March 10) close of 1,433.08 which was its lowest since Nov 3, 2022
Sentiment on the FKLI became risk-off last Friday. The index initially started off at 1,432 pts.
RHB Retail Research cited today (March 13) that after touching the day’s high at 1,435 pts, momentum turned negative, causing it to
closed at the day’s low of 1,414 pts.
The candlestick with a shaved lower shadow shows that the negative momentum has heightened. Riding on the bearish momentum, the index may correct towards the 1,400-pt support.
However, expect a mild rebound to occur near the psychological level. Breaching the immediate support would open door for a deeper correction towards the previous low of Oct 2022 ie the 1,360.50-pt level.
The correction should continue until the index is able to form a bullish reversal pattern. Since the bears are in control now, we switch over to a negative bias.
RHB have closed out the long positions (initiated at 1,441.50 pts, or the closing level of 7 Mar) after the stop-loss at 1,423 pts was triggered.
Conversely, initiate short positions at 1,414 pts ie the close of 10 Mar.
To manage the trading risks, the initial stop-loss is placed at 1,445 pts. The immediate support is revised to 1,400 pts, followed by 1,360.50 pts, or the low of 14 Oct 2022.
Meanwhile, the immediate resistance is pegged at 1,445 pts (7 Mar’s high), followed by the higher resistance at 1,474 pts, or 7 Feb’s close.
