The FBMKLCI (-0.38%) closed lower on Wednesday as investors were taking profits prior to the public holiday coupled with the mixed sentiment across the regional benchmark indices. The Energy sector (+1.12%) gained from the rebound in Brent oil prices, while the Construction sector (-1.42%) declined.
At 9.18am, the FBM KLCI opened at 1436.65.
RHB Retail Research, in a note today (Sept 29), said the FKLI bounced off the 200-day SMA line on Wednesday, attempting to resume the upside movement. The index futures began the session at 1,441 pts. After trading within the tight range of 1,442.50 pts and 1,436 pts, it closed at 1,440.50 pts – charting a long-legged Doji. The price action showed sentiment was neutral during Wednesday’s session, despite mild buying pressure emerging near the 200-day SMA line. We observed that the 50-day SMA line has turned into the overhead resistance now. In the event the index fails to cross the 50-day SMA line, there is high probability it will reverse – breaching the 200-day SMA line and retreating towards the 1,430 pts support. On the upside, strong resistance has formed at the 1,468.50-pt level. As long as the index stays below the 1,468.50-pt threshold, the bearish setup remains intact. Based on this, we retain the negative trading bias.
Traders are advised to hold on short positions initiated at 1,447.50 pts or 17 Aug’s close. To manage the trading risks, the stop-loss is set at 1,468.50 pts.
The immediate support sticks at 1,430 pts, followed by 1,400 pts. Conversely, the immediate resistance is set at 1,468.50 pts – 1 Aug’s high – and followed by the 1,500-pt level.
Malacca Securities (MSSB) said the FBMKLCI traded in the negative territory prior to the public holiday, while investors were focusing on the Energy sector amid the rebound in Brent oil prices. In the US stock markets, buying interest emerged within Nasdaq or growth stocks after the 10-year US Treasury yield dropped from its 15-year high. Also, traders will be looking at the Personal Consumption Expenditure that will be released later tonight for more clues from the Fed on its tone going forward.
Besides, MSSB believes the upside on Wall Street may be limited as the US government is facing a shutdown if the US Congress is not able to pass a funding plan by end-Sep. Commodities wise, the Brent crude oil traded on a volatile manner within the range of USD93-95/bbl level, while the CPO prices rebounded strongly near the RM3,800/MT level.
Sector focus: Given the rebound on Wall Street led by growth stocks, MSSB expects trading interest to be seen on the technology stocks. Meanwhile, the news on EKOVEST streamlining most of the business segments could spur trading interest within the construction, property, and plantation sectors. Also, traders will be focusing on trading opportunities ahead of the Budget 2024, such as the industrial products and consumer sectors.
The FBMKLCI ended lower and still trading below the 1,450 psychological level. Also, the technical readings on the key index were negative with the MACD Histogram turning lower and the RSI is below 50. The resistance is located around 1,465-1,470 and the support is envisaged around 1,430-1,440.
Maybank Investment Bank (Maybank IB) said the FBMKLCI Index gave back the previous day’s gains as buying interest soften ahead of the mid-week break due to a public holiday.
At the day’s end, the benchmark FBMKLCI index fell 5.44pts, or 0.38%, to 1,440.11pts, led by declines in PCHEM, PBBANK, MAXIS and SIMEPLT. Market breadth remained negative as losers outnumbered gainers by 572 to 341. A total of 2.97b shares valued at MYR1.94b changed hands.
Domestic sentiment remains weak, led by selling in the construction, healthcare and industrial sectors, while buying interest could emerge in energy names as crude oil price continues to rally.
Meanwhile, Maybank IB expects the FBMKLCI Index to range between 1,430pts and 1,450pts today, with support revised to 1,425pts and 1,413pts from 1,440pts.
