Bursa Malaysia has alternated between positive and negative finishes through the last four trading days since the end of the two-day slide in which it had slipped more than 10 points or 0.6 percent.
The Kuala Lumpur Composite Index now sits just above the 1,545-point plateau and it may extend its losses on Thursday.
At 9.16am, the FBMKLCI rose +2.03 points to open at 1,547.62.
RHB Retail Research in a note today (Feb 29) said the FKLI’s bullish momentum failed to follow through during Wednesday’s session.
The index opened at 1560.50 pts, touched the day’s high at 1,563 pts before falling to the day’s low at 1,544 pts and closing at 1,544
pts – recording 17.50 pts lower than the previous session.
The latest bearish candlestick has engulfed the previous five sessions, showing that the bears are having the technical advantage now.
An interim top has been formed at the 1,563-pt level.
Since the RSI is rounding downwards, expect the negative price action to follow through in the coming sessions, with a pullback towards the 1,515-pt support.
The house expect strong support to emerge at the 1,500-pt level.
As long as the index stay above the 1,500-pt level, they will hold on to our bullish bias.
Traders are advised to retain the long positions initiated at 1,455 pts, or the close of 3 Nov 2023.
To minimise the downside risks, the stop-loss is placed at 1,500 pts.
The immediate supports are marked at 1,515 pts and 1,500 pts.
Meanwhile, the nearest resistance is pegged at 1,563 pts – the high of 28 Feb – followed by the 1,600-pt level.
Malacca Securities (MSSB) said the FBM KLCI (-0.85%) ended lower, in line with the mostly negative performance in the regional stock markets, dragged by selected Utilities and Banking heavyweights.
On the broader market, the Utilities sector (-2.58%) was the worst performing sector, followed by the Construction sector (-1.08%).
The Day Ahead
The FBMKLCI pulled back after hitting resistance along 1,559 and profit taking mode emerged prior to the MSCI rebalancing activities, that will be effective 1st March.
Meanwhile, the US stock markets ended softer, as traders stayed cautious ahead of the Core PCE data that will be released tonight; consensus for core PCE stood at 0.4% MoM and it may sway the expectation for the Fed’s first rate cut going forward.
On the commodity market, the Brent oil price pulled back further as the US oil inventories rose more than expected last week, while Gold price secured above the USD2,030 zone yesterday.
In the cryptocurrency space, Bitcoin surged above US60k psychological level and nearer towards the ATH zone of USD69k.
Sectors focus: With the negative momentum kicking in, further profit taking activities may emerge on the broader market with higher volatility seen within the MSCI rebalancing stocks such as YTL and YTLPOWR.
Solid results that traders may take note today will include the Poultry sector as CCK and CAB see stronger growth in profits, while UNIQUE, under the fire-fighting segment may continue with its upward momentum.
Besides, KGB continued its earnings momentum for this quarter.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI retraced significantly after a breakout earlier.
The technical readings on the key index were mixed, with the MACD Histogram extending the first negative bar, while the RSI is hovering above 50.
The resistance is envisaged around 1,565- 1,575 and the support is set at 1,530-1,540.
CGSCIMB said Asian equities slid, heading for their worst day in a month, dragged lower by a late selloff in Chinese stocks as regulators moved to shrink the size of a popular quantitative trading strategy.
The local benchmark FBMKLCI (KLCI) gave up13.21pts or 0.85% to end the day at 1,545.59.
It was a sea of red across the board with utilities (-2.58%), construction (-1.08%) and industrial products (-1.04%) topping the decliners chart.
Trading volume surged to 4.78bn (up from 3.88bn on Tuesday) while trading value climbed to RM3.30bn (higher from RM3.09bn previously).
Market breadth remained negative for a fourth consecutive day as 780 decliners thumped 311 winners.
The benchmark recorded a long black candle yesterday, forming an inside day in the process.
The bears closed the door shut yesterday, eliminating the bullishness of the previous day’s long white candle.
Expect the benchmark to stay in consolidation again today, targeting a move below 1,542.
The rising trend line currently sits at 1,540 may also act as support in the near term.
The support at 1,534-1,538 would act as a last line of defense for the bulls in the near term.
Once this consolidation is done, we believe that there is another leg up to retest the 1,570-1,583 levels next.
Their portfolio stays in risk-on mode this week.
