FBM KLCI Moves Towards A Strong Rebound To Reclaim 1,400-Pt Psychological Threshold

The Malaysia stock market has moved higher in two of three trading days since the end of the five-day losing streak in which it had tumbled almost 65 points or 4.6 percent.

At 9.20am, the FBM KLCI opened at 1404.49.

RHB Retail Research said today (March 20), the FKLI staged a strong rebound last Friday, surging 27 pts to close at 1,412 pts.

Initially, sentiment was weak with the index opening lower at 1,382.50 pts.

After setting a foothold at the day’s low of 1,382 pts, strong momentum propelled the index until it hit the day’s high of 1,413.50 pts before closing at 1,412 pts.

The latest bullish candlestick shows the bullish momentum is picking up after climbing above the 1,400-pt threshold. The 1,400-pt level has turned from the resistance to become the latest support.

Since the momentum is improving, the index may extend its upward movement to test the 1,423-pt resistance.

Meanwhile, observe that both the 50-day and 200-day SMA lines are trending lower, suggesting the bears still have the technical advantage.

“Despite the change in the immediate term momentum, we are keeping to our bearish bias until the index breaks past the stop-loss. We advise traders to hold on to their short positions initiated at 1,414 pts (10 Mar’s close).” it said.

To mitigate the trading risks, the research house added, the initial stop-loss is fixed at 1,445 pts. The immediate support has been changed to 1,400 pts, followed by 1,382 pts ie the low of 17 Mar. Conversely, the immediate resistance is eyed at 1,423 pts – 1 Mar’s low – followed by 1,445 pts, or the high of 7 Mar.

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