Bursa Malaysia has finished lower in three straight sessions, sinking almost 20 points or 1.2 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,540-point plateau and it figures to see continued consolidation again on Tuesday.
At 9.16am, the FBMKLCI dipped -1.45 points to open atvl 1,541.08.
RHB Retail Research in a note today (Apr 16) said the FKLI extended its correction phase yesterday, shedding 8.50 pts to close at 1,542 pts.
The index opened lower at 1,544 pts, and oscillated in a tight range between the 1,546.50-pt high and 1,539.50-pt low before closing below the opening level.
The latest bearish candlestick heading towards the 50-day SMA line indicates weakening momentum.
This is supported by the RSI pointing lower at 50% (neutral level), which increases the risk of the index falling further below the SMA line in the near term.
If it dips below the SMA line, the index may retrace further towards the 1,520-pt support level, followed by a consolidation before a rebound takes place.
Unless the index falls below the 1,520-pt support level, we will maintain our bullish trading bias.
They advise traders to retain the long positions initiated at 1,455 pts, which was the close of 3 Nov 2023.
To minimise the trading risks, the trailing-stop is set at 1,520 pts.
The immediate support is at 1,520 pts, followed by 1,500 pts.
Conversely, the immediate resistance is pegged at 1,563 pts, with the higher resistance at 1,600 pts.
Malacca Securities (MSSB) said rhe FBMKLCI (-0.55%) ended lower, in line with the negative performance across the regional stock markets, as the index was dragged by Utilities, Banking and Telco heavyweights.
On the broader market, the Property sector (-2.48%) was the worst decliner.
The Day Ahead
Following the rising geopolitical tension in the Middle East, they noticed more selling this week, where companies pulled back from their respective 52-week highs.
Similarly, Wall Street ended weaker on the back of (i) rising uncertainty in the Middle East, (ii) elevated Treasury yields (highest since November), and (iii) stronger-than-expected retail sales.
They believe the market could be pricing in lower probability of interest rate cuts going forward; the FOMC meeting in 2024 has less than 50% probability in cutting rates.
On the commodity front, Brent oil price is hovering above USD90, while gold price traded firmer above US2350 on the back of heightened geopolitical risk.
The CPO price dipped below RM4200 as rebound in production offset the increase in exports.
Sectors focus: They believe the selling pressure may persist over the near term given the uncertainty in the Middle East, as well as the negative sentiment on Wall Street, stocks on the local front could be impacted.
Meanwhile, the commodity-related sectors such as O&G and Gold should still be in traders’ radar.
Besides, they like stocks under the solar-theme as Solarvest will be installing Malaysia’s largest solar system at 1Utama mall, which could provide buying flow towards the whole sector.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended lower for the 3rd consecutive day.
However, the technical readings on the key index were mixed, with the MACD Histogram extending another positive bar, while the RSI dips below 50.
The resistance is envisaged around 1,555-1,560 and the support is set at 1,520-1,525.
CGS International (CGS) said Asian stock markets finished in negative territory on Monday amid the current
tension in the Middle East.
However, Shanghai’s SECI (+1.26%) was the sole gainer and rose on Beijing’s renewed regulatory support.
The local benchmark FBMKLCI (KLCI) fell 8.51pts or 0.55% to end the day at 1,542.53.
All sectors dipped in the red with the largest losses coming from property (-2.48%), healthcare (-1.84%) and telecommunications (-1.68%).
Trading volume increased to 4.28bn (up from 3.88bn on Friday) while trading value improved to RM3.25bn (up from RM3.00bn previously).
Market breadth turned negative as 230 gainers were thumped by 993 decliners.
The benchmark gapped down and closed below the 20-day EMA yesterday with its third consecutive black candle.
IF the current uptrend is to continue, the KLCI ought to rebound in the next couple of days.
The Advance/Decline ratio has reached a level where rebounds tend to take place.
Immediate support is placed at 1,537.
A break below the said support may warn that a deeper pullback or a longer-term sideways consolidation is taking place.
Other support levels are at 1,528 and 1,508-1,521 thereafter.
On the upside, 1,559 acts as the overhead resistance followed by 1,570-1,583 next.
Their portfolio stays in risk-on mode this week.
