Bursa Malaysia headed south again on Thursday, one day after ending the four-day slide in which it had dropped more than 25 points or 1.7 percent. The Kuala Lumpur Composite Index now sits just above the 1,600-point plateau, although it may give up that support on Friday.
RHB Investment Bank Bhd (RHB Research) advises maintaining short positions on the FTSE Bursa Malaysia KLCI Futures (FKLI) as the index fell below the 1,600-point support level, closing at 1,598.50 points. On Thursday, FKLI began trading at 1,609 points, briefly reaching a high of 1,613 points before retreating to a session low of 1,597.50 points.
The session's "lower low" candlestick signals a continuation of the correction, with the Relative Strength Index (RSI) pointing downward, indicating growing negative momentum.
If the index breaches the 200-day SMA line, it is expected to decline towards the revised support level of 1,580 points, with 1,620 points acting as immediate resistance. Given the ongoing bearish momentum, RHB Research retains its bearish outlook.
Traders are advised to hold on to short positions taken on 4 October at the 1,627.50-point close. To manage trading risks, the initial stop-loss is set at 1,639 points. Following the recent bearish breakout, further support is seen at 1,580 points, with an extended lower support target at 1,550 points. Resistance levels are pegged at 1,620 points and 1,639 points.
In contrast, RHB Research recommends maintaining long positions on the Crude Palm Oil Futures (FCPO) contract, which closed lower by RM23 at RM4,964. After opening at RM4,970, FCPO traded between RM5,018 and RM4,826, ending the session with a "long lower shadow" candlestick, indicating a sideways movement for consolidation.
While the immediate support stands firm at RM4,800, the ongoing technical setup favours bulls if the price holds above this level.
For coming sessions, FCPO may attempt to test the immediate resistance at RM5,200 after consolidation, supported by upward-trending 50- and 200-day SMA lines. Traders are encouraged to keep their long positions initiated on 20 September at RM3,947, with a trailing stop set at RM4,800 to limit downside risks.
The next key resistance is marked at RM5,200, followed by RM5,500, while further support remains at RM4,600.
