The Malaysia stock market has moved lower in two straight sessions, although it has given up just three points or 0.2 percent in that span. The Kuala Lumpur Composite Index now rests just beneath the 1,430-point plateau and it’s likely to remain in that neighbourhood again on Thursday.
At 9.20am, the FBM KLCI opened at 1427.82.
RHB Retail Research, in a note today (April 6), said after Monday’s “Dark Cloud Cover” bearish reversal pattern, the FKLI took further profits yesterday, closing 2 pts lower at 1,432 pts.
The index opened at 1,434 pts and briefly touched the day’s high of 1,435.50 pts before falling sharply to the day’s low of 1,426 pts. It then recouped most of its intraday losses to close below the opening level.
Yesterday’s bearish candlestick with a long lower shadow confirms the recent “Dark Cloud Cover” bearish reversal signal, indicating a pullback in the coming sessions, with a focus on the 1,412-pt immediate support level.
Given the recent bearish crossover, coupled with the 50-day and 200-day SMA lines pointing downwards, the index is likely to fall further below the 1,412 pts immediate support level in the medium-term.
Based on the current retracement, RHB maintains their bearish bias. Traders should keep to the short positions initiated at 1,414 pts, which was the close of 10 Mar.
To mitigate the trading risks, the initial stop-loss is set at 1,445 pts. The immediate support is set at 1,412 pts (17 Mar’s close), followed by 1,400 pts.
Conversely, the immediate resistance is kept at 1,445 pts (7 Mar’s high), followed by 1,476 pts, which was the close of 17 Feb.
Meanwhile, Maybank Investment Bank today cited that late buying failed to lift the FBMKLCI Index higher as it ended weaker for the second consecutive day in tandem with mixed performance across the regional equities markets.
The benchmark index fell by 0.06pts, to close the day at 1,429.55, led by declines in INARI, GENM, MISC and GENT. Market breadth was mixed with gainers barely outnumbering losers by 396 to 366.
A total of 2.33b shares valued at MYR1.42b changed hands.
Buying interest was scattered and selective, and the energy and technology sectors pulled back following the recent surge while the rally in property and utilities names was extended.
Technically, Maybank expects the FBMKLCI Index to range between 1,420pts and 1,450pts today, with supports remaining at 1,380pts and 1,350pts.
