The Malaysia stock market has finished lower in three straight sessions, giving up almost 10 points or 0.7 percent along the way. The Kuala Lumpur Composite Index now rests just above the 1,425-point plateau and it’s expected to see little movement on Friday.
At 9.05am, the FBM KLCI opened at 1425.18.
RHB Retail Research said today (May 12) the FKLI wrote off most of its intraday gains yesterday, closing just 0.5 pts positive at 1,424.50 pts – still above the 50-day SMA line.
The index opened higher at 1,429 pts and then whipsawed in a negative fashion between the 1,432 pts high and 1,422 pts low, before closing below the opening level.
Despite closing mildly positive, the FKLI’s close below the opening level indicates strong selling pressure in the late session.
RHB anticipates the selling pressure to persist in the coming sessions – dragging the FKLI lower below the 50-day SMA line towards the 1,412 pts immediate support.
If it falls below the immediate support, the major downtrend would firm up further – heading towards the 1,400 pts threshold.
With the RSI weak at 48% and the 50-day SMA line pointing downwards, RHB maintains their bearish trading bias.
Traders should maintain the short positions initiated at 1,414 pts, ie 10 Mar’s close.
To mitigate the trading risks, the stop-loss threshold is set at 1,437 pts. The immediate support is at 1,412 pts – 17 Mar’s close – and followed by 1,400 pts. The nearest resistance is at 1,437 pts or 3 Apr’s close, and followed by 1,445 pts, ie 7 Mar’s high.
Maybank Investment Bank stated today (May 12) that despite the FBMKLCI Index’s energetic start, buying interest started to fizzle out midday which saw the index paring down the earlier gain to close the day slightly lower.
The benchmark index skidded 0.50pts, or 0.04%, to close the session at 1,425.18, led by declines in INARI, PETDAG, PCHEM and CIMB. Market breadth remained negative with losers outnumbering gainers by 467 to 310.
A total of 3.40b shares valued at MYR1.62b changed hands.
Mild bargain-hunting was spotted in the small caps stocks while the majority of sector indices continued to limp lower as domestic sentiment remained soft.
Technically, Maybank IB expects the FBMKLCI Index to range between 1,415pts and 1,445pts today, with supports remaining at 1,380pts and 1,350pts.
CGSCIMB cited that the local benchmark FBMKLCI (KLCI) inched 0.50pts or 0.04% lower to end the day at 1,425.18. The broader market
was under pressure with technology (-1.26%), healthcare (-1.12%) and telecommunications (-0.94%) leading the laggards. The only gainers for the day were plantation (+1.11%) and REIT (+0.48%).
Trading volume rose to 3.40bn (up from 2.78bn on Wednesday) whereas trading value decreased to RM1.62bn (down from RM1.65bn previously). Market breadth stayed negative as 310 gainers beaten down by 467 decliners.
The benchmark formed a gravestone doji-like candle yesterday as the bears continued to exert pressure, pushing the index below the 20-day EMA. The market appears to be going nowhere anytime soon as more sideways chop between 1,412-1,438 may be taking place now. An upside breakout and close above the top end of the said range would indicate that the KLCI is targeting to fill the 10th March gap of 1,445-1,448 next.
On the other hand, a close below the 1,412 level would point more weakness towards the 1,400 psychological levels thereafter. CGSCIMB stays in risk-on mode this week.
However, if the index closes below 1,428 at the end of today, our portfolio will revert to risk-off mode next week.
