Bursa Malaysia has tracked lower in four straight sessions, dropping more than 25 points or 1,7 percent along the way. The Kuala Lumpur Composite Index now sits just beneath the 1,610-point plateau and it's expected to open to the downside again on Wednesday.
RHB Investment Bank Bhd (RHB Research) has issued a mixed outlook for the FTSE Bursa Malaysia KLCI Futures (FKLI) and crude palm oil futures (FCPO), advising short positions on the FKLI while maintaining long positions on the FCPO.On Tuesday, the FKLI fell by 2.5 points, closing at 1,609 points after opening at 1,612 and moving between a high of 1,618.5 and a low of 1,608.
This "lower low" close indicates ongoing bearish momentum, with the RSI pointing downwards, suggesting further negative price action. RHB Research expects the index to test the 1,600-point support, which may prove weak in the current bearish setup. A breach could see the FKLI retreat towards the lower support level at 1,550 points.
However, should the index climb above the 1,639-point resistance, it could lift market sentiment. For now, traders are advised to keep short positions initiated on 4 October at 1,627.5 points, with a stop-loss threshold at 1,639 points.
Immediate support and resistance levels are pegged at 1,600 and 1,639 points, respectively, with further support at 1,550 points and resistance at 1,657 points.
Meanwhile, RHB Research remains positive on the FCPO despite a recent dip of RM170, which saw it close at RM5,026. The commodity opened at RM5,172, peaked at RM5,195, and reversed to a low of RM5,020.
The latest session resulted in a long bearish candlestick, suggesting a correction phase may be underway, with a possible pullback to the RM4,800 support level. Analysts expect this support to hold in a bullish setup, allowing for a rebound.
Traders are encouraged to hold long positions from 20 September at RM3,947, with a trailing stop at RM4,800. Key support levels are at RM4,800 and RM4,600, while resistance is positioned at RM5,200 and RM5,500.
RHB's strategy highlights a cautious outlook for FKLI with a bearish trading bias, while remaining optimistic about FCPO's potential rebound post-correction.
