The Malaysia stock market has moved higher in two straight sessions, gathering almost 25 points or 1.7 percent along the way. The FTSE Bursa Malaysia KLCI Index now rests just above the 1,420-point plateau and it’s expected to extend its gains on Thursday.
At 9.20am, the FBM KLCI opened at 1414.01.
RHB Retail Research, in a note today (March 30), said the index gained 14.5 pts on Wednesday and closed at 1,418.50 pts. Yesterday, the index opened at 1,404.50 pts, then trended north to print the day’s high of 1,420.50 pts before the close.
Since the formation of the Bullish Engulfing pattern (on 17 Mar), this is a strong follow-through of the “higher high” bullish candlestick – the latest closing price is higher than Bullish Engulfing’s closing price.
Furthermore, the RSI is trending higher, which implies that the bulls are gaining pace now.
Although the index charted a bullish candlestick, RHB thinks strong selling pressure will emerge between 1,423 pts and 1,445-pt level. As both the 50-day and 200-day SMA lines are still trending lower, the index may still be trending downwards in the medium term.
A breakout above 1,445 pts would negate the bearish setup and open the door for a further upside movement. As the stop-loss is intact, RHB maintains maintain a negative bias.
“We recommend that traders stick to the short positions initiated at 1,414 pts, or 10 Mar’s close. To manage the trading risks, the initial stop-loss is set at 1,445 pts,” it said in a note today (March 30).
The immediate support remains at 1,382 pts (17 Mar’s low), followed by 1,360.50 pts ie the low of 14 Oct 2022. The immediate resistance is at 1,423 pts (1 Mar’s low), followed by 1,445 pts which is the high of 7 Mar.
