Bursa Malaysia has moved lower in three straight sessions, slipping more than 25 points or 1.6 percent along the way.
The Kuala Lumpur Composite Index now rests just beneath the 1,650-point plateau although it may find traction on Tuesday.
RHB Retail Research (RHB) in a note today (Oct 1) said the FKLI extended the consolidation during Monday’s session, declining 10 pts and closing lower at 1,653.50 pts.
Yesterday, the index began trading at 1,664.50 pts.
After touching the 1,665.50 pts session’s high, it retraced to the 1,650 pts session’s low and closed at 1,653.50 pts – printing a “lower low” bearish candlestick.
They observed the RSI continuing to trend lower, signalling the bullish momentum is decelerating and opening the door for correction towards the 1,630-pt level.
Although the index is undergoing correction, RHB believed the bulls may attempt to stage a rebound near the 1,630 pts support.
In a bullish setup, support will be strong.
Meanwhile, the 50-day SMA line continues moving upwards and providing extra support for the technical setup.
As long as the index stays above the 1,630-pt threshold, they will stay with the positive trading bias.
Traders should hold on to the long positions initiated at 1,565.50 pts (the close of 6 Aug).
To mitigate the trading risks, the trailing-stop threshold is set at 1,630 pts.
The nearest support is marked at 1,630 pts, followed by 1,600 pts.
Conversely, the immediate resistance is pegged at 1,675
pts, followed by 1,700 pts.
