The FBMKLCI ended flat on Friday as investors were trading cautiously prior to the Jackson Hold Symposium despite both the deals from SIME-UMW and KLK-BPLANT were positive on the broader market’s tone. Meanwhile, the Construction, Properties and Utilities sectors traded firmly higher.
At 9.11am, the FBM KLCI opened at 1444.41.
RHB Research, in a note today (Aug 28), said the FKLI retraced 3 pts last Friday to close at 1,440.50 pts in an attempt to retain its position above the 200-day SMA line.
Last Friday, the index opened at 1,444 pts. It then fell to the day’s low of 1,435.50 pts day low but rebounded in the afternoon to close at 1,440.50 pts.
The index charted a bearish candlestick with a long lower shadow. The price action suggests that the 200-day SMA line is still acting as a support now.
In the event the negative momentum follows through, the FKLI may retreat towards the 1,430-pt level.
Otherwise, the index would consolidate along the 200-day SMA line. At this juncture, the Bearish Marubozu (formed on 17 Aug) remains intact, hence the bears are still in control now. As such, RHB maintains their bearish bias.
RHB recommends traders to hold on to the short positions initiated at 1,447.50 pts (17 Aug’s close). To mitigate the trading risks, the initial stop-loss is fixed at the 1,468.50-pt level.
The first support stays at 1,430 pts, followed by 1,400 pts. On the flipside, the first resistance remains unchanged at 1,468.50 pts – 1 Aug’s high – followed by 1,500 pts.
Malacca Securities (MSSB) said the FBMKLCI ended flat on Friday as investors were trading cautiously prior to the Jackson Hold Symposium despite both the deals from SIME-UMW and KLK-BPLANT were positive on the broader market’s tone. Meanwhile, we noticed the Construction, Properties and Utilities sectors traded firmly higher.
The stocks on the local front were relatively stronger as compared to the regional benchmark indices. Given the positive trading tone from Wall Street overnight, MSSB expects the buying interest to spillover towards stock on the local front within the technology stocks.
Meanwhile, with the announcement of a special financial zone to be created in Forest City last Friday after market hours, it should provide further catalysts on the stock markets, providing trading opportunities to the broader market.
Also, since the market is focusing on the brighter economic outlook in the US, brushing off the interest rate hike concerns, downside risk may be limited.
Commodities wise, the Brent crude oil rose above USD84/bbl, while the CPO prices remained above RM3,800/MT.
Sector focus: Overall sentiment should be positive with the trading focus revolving around the properties and construction sector amid the announcement of a special financial zone to be seen in Forest City. It may translate to trading interest within the building material as well.
Besides, MSSB likes the energy sector with the promising results since last week.
The FBMKLCI formed a small hammer candle above the SMA200 zone and it should perform some positive bias trading tone in the near term as the technical readings are turning more positive. The MACD Histogram forming a rounding bottom in the negative territory, while the RSI is hovering above 50.
The FBMKLCI’s resistance is located around 1,450-1,460. Support is set around 1,430-1,435.
