The Malaysia stock market has moved lower in back-to-back sessions, although it had given up less than a single point in that span. The Kuala Lumpur Composite Index now rests just shy of the 1,445-point plateau although it may stop the bleeding on Tuesday.
At 9.23am, the FBM KLCI opened at 1443.24.
RHB Retail Research, said today (Aug 29) the FKLI’s movement attempted to rebound strongly above the 200-day SMA line yesterday before writing-off most of its intraday profits to settle 5 pts positive at 1,445.50 pts.
The index’s movement opened higher at 1,445 pts and then fluctuated between the 1,442-pt low and 1,451.50-pt high, which saw it close 0.5 pts above the opening level.
Despite opening higher, the FKLI’s movement formed a neutral candlestick with long upper shadow, indicating strong effort for a positive rebound, followed by significant intraday profit-taking.
RHB foresees sideway trading with a potential upward bias ahead, testing the 1,452.50-pt resistance in upcoming sessions.
However, looking at the medium term, substantial selling pressure beneath the resistance is anticipated, would be leading the FKLI to retreat towards 1,430 pts, reinforcing the Bearish Marubozu pattern formed on 17 Aug.
Consequently, RHB’s bearish stance remains unchanged.
RHB recommends traders to hold on to the short positions initiated at 1,447.50 pts or 17 Aug’s close. To mitigate the trading risks, the initial stop-loss threshold 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 is now set at 1,452.50 pts – 22 Aug’s high – and followed by the abovementioned 1,468.50 pts, ie 1 Aug’s high. Maybank Investment Bank (Maybank IB) said the FBMKLCI Index started the week on a weaker note despite paring earlier losses as the late buying interest failed to keep the index in the green territory yesterday.
At day’s end, the benchmark index shed 0.35pts, or 0.02%, to close at 1,444.06pts, led by decliners GENM, KLK, PETDAG and GENTING.
Market breadth however remained positive with gainers outnumbering losers by 580 to 478. A total of 4.46b shares valued at MYR2.85b changed hands.
The Malaysian PM’s announcement of a special financial zone in Iskandar Malaysia gave property names a big boost as the sector index rose 3.76%, extending the recent rally in property stocks.
Technically, Maybank IB expects the FBMKLCI Index to range between 1,440pts and 1,460pts today, with supports at 1,440pts and 1,413pts.
Malacca Securities (MSSB) said the FBMKLCI (-0.02%) traded flat for another session, but the investors were focusing on the small cap, the FBM Small Cap rose 1.10%. Besides, traders continued their positive views on the special financial hub news last week and buying interest was noticed within the Property and Construction sectors.
The FBMKLCI traded in a narrow range for the past two trading days, while investors were focusing on the small cap stocks. Meanwhile, MSSB believes the buying interest may spillover to their stock markets given the positive performance on Wall Street overnight. Also, with the special financial hub news being announced last week, we expect the trading interest to stay vibrant at least for the near term.
Nevertheless, traders should take note of the several key economic data this week that may shape the tone of the Federal Reserve going forward.
Commodities wise, the Brent crude oil steadied above USD84/bbl, while the CPO prices continued to stay above RM3,900/MT.
Sector focus: As Wall Street turned positive, MSSB expects buying support to be seen within fundamentally solid technology stocks.
Meanwhile, the special financial hub news is likely to spur further trading activities within the Property, Construction, Industrial Products and Utilities sectors as well as the building material segment.
Also, the firmer oil price may build optimism within the Energy sector.
The FBM KLCI formed another narrow candle above the SMA200 level. The technical readings on the key index are still positive bias with the MACD Histogram forming a rounding bottom pattern, while the RSI is hovering above 50. The FBM KLCI’s resistance is envisaged around 1,450-1,460 and the support is located around 1,430-1,435.
