The Malaysia stock market has moved lower in four straight sessions, sinking more than 35 points or 2.6 percent along the way. The Kuala Lumpur Composite Index now rests just above the 1,420-point plateau and it’s expected to open under pressure again on Tuesday.
At 9.08am, FTSE Bursa Malaysia KLCI (FBM KLCI) benchmark index fell -9.38 points to open at 1,412.45 from Monday’s close of 1,421.83.
RHB Retail Research, in a note today (March 14) said yesterday, the FKLI experienced a strong rebound from its intraday low before closing with a neutral tone – up by 1-pt to settle at 1,415 pts. Initially starting off mildly positive at 1,416 pts, the index fluctuated throughout the session, with a high of 1,419 pts and a low of 1,407 pts.
While ending just below the opening level, it remained above the previous close. The neutral candlestick, with a long lower shadow, shows that the negative momentum has stalled.
However, the medium-term bearish trend suggests the index is likely to fall towards the 1,400- pt support mark. Nevertheless, we cannot discount the possibility of a mild rebound in the coming sessions, supported by the recently improved RSI indicator, which is still below the 30% negative territory.
A breach of the 1,400-pts support would indicate the potential for a deeper correction towards the previous low of October 2022 or 1,360.5 pts. For now, we maintain our bearish bias.
The research house recommends that traders stick to short positions, adding they initiated these at 1,414 pts – the close of 10 Mar.
To manage the trading risks, the initial stop-loss threshold is placed at 1,445 pts.
The immediate support is set at 1,400 pts, followed by 1,360.50 pts, or 14 Oct 2022’s low.
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.
Meanwhile, CGS-Securities expects the market to remain weak in the near term due to concerns over possible contagion effect from Silicon Valley Bank’s (SVB) fallout.
In a strategy note on Monday (March 13), the research house said the FBM KLCI fell 1.4% week-on-week in the week ended March 10 due to concerns over SVB crisis.
CGS-CIMB said foreign investors were the largest net sellers, adding they were net selling Malayan Banking Bhd and Public Bank Bhd.
It said local institutional investors were the largest net buyers; they net bought Petronas Chemicals Group Bhd and Cape EMS Bhd.
“Retail investors were the second largest net buyers last week, net buying Maybank and Public Bank,” it said.
Financial services largest by market cap
“The top three largest sectors in Bursa Malaysia by market cap on 10 Mar 2023 were financial services (23.3% of total), consumer products and services (16.2%), and industrial products and services (13.1%).
“As of March 10, the three sectors with the highest number of constituents were industrial products and services (28.2% of total), consumer products and services (20.9%), and technology (11.2%),” it said.
