Bursa Malaysia has moved lower in two straight sessions, dipping almost 10 points or 0.6% along the way. The Kuala Lumpur Composite Index now sits just shy of the 1,595-point plateau, although it's expected to bounce higher on Monday.
RHB Investment Bank Bhd (RHB Research) has advised traders to maintain short positions on the FTSE Bursa Malaysia KLCI Futures (FKLI) while shifting to a long bias for the Crude Palm Oil Futures (FCPO) following recent market developments.
The FKLI faced continued selling pressure last Friday, closing below the 200-day simple moving average (SMA) line. The index opened at 1,597.50 points, oscillated between 1,602.50 and 1,590 points, and ultimately settled at 1,595 points.
RHB Research noted that the 200-day SMA line remains a strong overhead resistance, and the 50-day SMA line is trending downwards, adding pressure. The Relative Strength Index (RSI) is also showing weakening momentum, further indicating a bearish outlook.
Traders are advised to maintain short positions initiated on Oct 4 at 1,627.50 points, with the stop-loss set at 1,639 points. The nearest support levels are marked at 1,580 points and 1,550 points, while resistance levels are seen at 1,620 points and 1,639 points.
The FCPO staged a bullish breakout last Friday, breaching the RM5,000 resistance level to close at RM5,020. The commodity opened at RM4,874, reached a session low of RM4,857, and climbed to a session high of RM5,039 before closing with a fresh white candlestick.
RHB Research highlighted the upward-turning RSI, signalling strong bullish momentum. The next resistance levels are identified at RM5,200 and RM5,500, while support levels are at RM4,850 and RM4,750.
The bank closed its short positions (initiated on Nov 21 at RM4,772) after the stop-loss at RM4,900 was triggered. It now advises traders to initiate long positions at the Nov 29 close of RM5,020, with an initial stop-loss set at RM4,750.
RHB Research remains cautious but notes that the bullish momentum in FCPO presents promising upside potential, while FKLI's technical indicators continue to favour the bears.
