Bursa Malaysia May See Continued Strength

The Malaysia stock market has alternated between positive and negative finishes through the last seven trading days since the end of the four-day losing streak in which it had dropped more than a dozen points or 0.9 percent. The Kuala Lumpur Composite Index now rests just above the 1,423-point plateau and it may add to its winnings on Monday.

At 9.15am, the FBM KLCI opened at 1432.72.

RHB Retail Research, said today (May 8) the FKLI underwent strong bullish momentum last Friday as it gained 8.5 pts to close at 1,433.50 pts, thereby pushing above the 50-day SMA line.

The index opened at 1,420 pts, printed the intraday low of 1,417.50 pts, then progressed higher throughout the session until it recorded the day’s high of 1,435 before closing.

The latest bullish candlestick shows that the bulls are picking up speed and eyeing the 1,437-pt immediate resistance. If it crosses this point, the FKLI should chart a fresh 1-month high, and improve the technical setup.

However, RHB believes strong resistance will emerge at 1,437 pts. As long as the index remains below this threshold, the bears should still have the technical advantage, as shown by the Dark Cloud Cover bearish pattern formed on 4 Apr.

For now, RHB will maintain a negative trading bias until the stop-loss is breached. Traders should maintain the short positions initiated at 1,414 pts, ie 10 Mar’s close. To mitigate the trading risks, the stop-loss is set at 1,437 pts.

The immediate support is at 1,412 pts – 17 Mar’s close – followed by 1,400 pts.

Conversely, the nearest resistance is at 1,437 pts – 3 Apr’s close – followed by 1,445 pts or the high of 7 Mar.

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