KLSE Sentiment Turns Mildly Positive Near 1,400 Pts

The Malaysia stock market has alternated between positive and negative finishes through the last five trading days since the end of the five-day losing streak in which it had tumbled almost 65 points or 4.6 percent.

At 9.15am, the FBM KLCI opened at 1408.60.

RHB Retail Research, in a note today (March 22), said after staging a pullback on Monday, the FKLI closed three points higher at 1,404 pts yesterday amid volatility during the intraday session.

The index started off mildly positive at 1,403.50 pts before whipsawing between 1,398 pts and 1,413 pts – it closed just above the opening level.

The latest sentiment following the recent pullback indicates a pause from profit-taking, and the FKLI’s short-term rebound will likely continue in the coming sessions.

The index formed a “Bullish Engulfing” pattern last Friday, and is currently forming a “higher low” bullish structure above 1,400 pts – indicating the short-term positive rebound towards the 1,423-pt immediate resistance may persist in the coming sessions.

For the major trend, it is worth noting that the 50- and 200-day SMA lines continue to trend lower, suggesting the bears still have the technical advantage.

Hence, RHB expects the FKLI to rebound higher in the coming sessions before turning bearish in later sessions after hitting the 1,445-pt resistance.

Based on the medium-term outlook, RHB maintains their bearish bias and advise traders to hold on to their short positions initiated at 1,414 pts, ie 10 Mar’s close.

To mitigate the trading risks, the initial stop-loss threshold is fixed at 1,445 pts. The immediate support is set at 1,400 pts and followed by 1,382 pts, which was 17 Mar’s low.

Conversely, the immediate resistance is at 1,423 pts – 1 Mar’s low – and followed by 1,445 pts or the high of 7 Mar.

MayBank investment Bank cited that the FBMKLCI Index rebounded yesterday in tandem with generally stronger performance in the regional equities markets – boosted by overnight gains in the US market.

The benchmark index rose 4.74pts, or 0.34%, to end the day at 1,406.55, led by advances in CDB, PETDAG, GENT and PBBANK. Market breadth turned positive with gainers outnumbering losers by 483 to 368.

A total of 3.22b shares valued at MYR1.85b changed hands.

For the first time since May-21, the healthcare index traded above the 200-day EMA line, turning the current bias more favourable while bargain hunting is expected to continue across the board.

Technically, Maybank expects FBMKLCI Index to range between 1,390pts and 1,430pts today, with supports remaining at 1,380pts and 1,350pts.

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