The Malaysia stock market has moved lower in back-to-back sessions, sliding almost 6 points or 0.4 percent in that span. The Kuala Lumpur Composite Index now sits just beneath the 1,455-point plateau although it may find support on Monday.
At 9.16am, the FBM KLCI opened at 1452.90.
RHB Retail Research, in a note today (Sept 11), said the FKLI slid below the 200-day SMA line on Friday, retreating 7 pts to close at 1,433.50 pts.
The index started off trading at 1,440 pts and after touching the day’s high at 1,441 pts, it progressed lower throughout the session, hitting the day’s low of 1,432.50 pts and closing in negative territory. The latest negative price action has erased the bulk gains made on Wednesday and Thursday.
In the event the negative momentum follows through, the index will pull back towards the 50-day SMA line, or the 1,430-pt support.
Breaching below the immediate support will strengthen the bearish technical setup. As of now, the 1,450-pt level remains as the immediate resistance.
Since the RSI is trending below the 50% level, showing the negative momentum is in play, RHB keeps their bearish bias unchanged.
Traders should hold on to the short positions initiated at 1,447.50 pts, or 17 Aug’s close. To minimise the trading risks, the stop-loss is placed at 1,468.50 pts.
The nearest support is marked at 1,430 pts, followed by 1,400 pts. Conversely, the nearest resistance stays at 1,450 pts, followed by 1,468.50 pts, or the high of 1 Aug.
Malacca Securities (MSSB) said the FBMKLCI (-0.35%) ended lower due to uncertain sentiment prior to the by-elections in Johor and weaker regional market sentiment.
On the broader market, the Technology sector (-1.53%) fell as China banned the usage of iPhones in government agencies, while the leading sector was the Utilities sector (+1.23%).
The FBMKLCI ended lower last week prior to the by-election over the weekend, coupled with weaker regional stock markets performance.
Since both the Johor by- elections have concluded, MSSB expects the market to perform better in the near term.
Also, MSSB expects the positive rebound on Wall Street may spillover to stocks on the local front. However, given the fluid developments in the political scene, it may limit the upside potential of the stock markets and we believe traders may turn their attention to value stocks during uncertainty periods.
Commodities wise, the Brent crude oil traded slightly above the USD90/bbl level, while the CPO prices were mildly lower but formed a hammer candle above the RM3,800/MT level.
Sector focus: With the news that China extends the iPhone ban to local government and state-owned firms may contribute to the weaker sentiment across the technology sector. Meanwhile, MSSB still favours the O&G sector on the back of healthy price movements on Brent oil prices.
MSSB thinks investors will re-assess the recent quarterly results to position themselves for solid fundamental companies into 4Q23.
The FBMKLCI traded lower and formed a bearish candlestick. Meanwhile, the technical readings on the key index were mixed with the MACD Histogram forming a negative bar, but the RSI is still hovering above 50. The resistance is located around 1,465-1,470, while the support is set around 1,430-1,440.
CGSCIMB said the local benchmark FBMKLCI (KLCI) slipped 5.12pts or 0.35% to end the day at 1,454.95.
Week-on-week, the index lost 8.48pts or 0.58%. The top laggards for the day were technology (-1.53%), healthcare (-1.31%) and energy (-1.04%). On a positive note, utilities (+1.23%), construction (+0.64%) and REIT (+0.21%) were the top gainers.
Trading volume fell further to 2.55bn (down from 3.21bn on Thursday) while trading value tapered off to RM1.85bn (down from RM2.02bn previously).
Market breadth stayed negative as 364 gainers thumped by 503 losers. The benchmark formed a black candle last Friday, breaking below the downtrend line from the 1,527 highs again – second time within a week.
For now, CGSCIMB expects the upside to remain capped at 1,465 before the index attempts another breakout move above the said level.
However, if the bulls were to give us a surprise and push prices above 1,465, then the index may continue on its climb towards 1,476-1,485 next. Any close below 1,452 (or the 20-day EMA) warns that the benchmark may be heading into another consolidation phase – either continue to chop sideways or endure a deeper correction.
The rising 50-day EMA, together with the 1,430-1,438 band remains the key support in the near term. CGSCIMB’s portfolio stays in risk-on mode this week.
