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The FBM KLCI (-0.42%) ended lower for the 3rd consecutive day in line with the regional performances, as investors were trading cautiously prior to the FOMC’s outcome.
The Healthcare sector (+1.62%), however rose due to buying pressure in selected glove heavyweights following Supermax’s news, while the Utilities sector (- 0.69%) fell.
At 9.21am, the FBM KLCI opened at 1452.90.
RHB Retail Research said today (Sept 21) they observed the FKLI posting a pullback movement yesterday, retreating 3.50 pts to reach 1,451.50 pts, with its sights set on the 50-day SMA line.
The index’s movement began at a lower point of 1,454 pts. It then fell to an intraday low of 1,449 pts before moderately rebounding, ultimately closing in negative territory.
This recent pullback indicates a correction phase that is heading towards the 50-day SMA line following the recent rebound, which reached a high of 1,459 pts.
With the RSI pullback to 55% from its previous 57% in positive territory, RHB anticipates momentum to be softer and index will be moving sideways for consolidation below the critical resistance of 1,468.50 pts.
However, there is strong selling pressure expected to resist the 1,468.50-pt threshold, maintaining the overall bearish structure.
Unless this level is breached, RHB maintains their bearish stance.
Traders are recommended to retain the short positions initiated at 1,447.50 pts or 17 Aug’s close.
To manage the trading risks, the stop-loss threshold is set at 1,468.50 pts.
The first support is marked at 1,430 pts and followed by 1,400 pts. Meanwhile, the first resistance is pegged at the abovementioned 1,468.50 pts – 1 Aug’s high – and followed by the 1,500-pt level.
Malacca Securities (MSSB) said the FBMKLCI has ended lower for the third trading day prior to the FOMC meeting.
Given the tone from the Fed has turned mildly hawkish, signalling that the Fed may potentially hike the interest rates in the next few meetings, the market is likely to take it negatively and selling pressure may persist within the stock market.
Nevertheless, MSSB believes thematic buying support should pick up on the back of domestic driven catalysts such as the NETR and NIMP blueprints. Commodities wise, the Brent crude oil has continued retraced from the recent high and currently below the USD94/bbl level, while the CPO prices are still rangebound along RM3,700-RM3,800/MT level.
Sector focus: As the Fed has given a slightly hawkish outlook in the FOMC meeting, MSSB expects the sentiment on the technology sector could be negatively affected at least for the near term. However, we still favour stocks that are related to the NETR and NIMP blueprints. Traders may still focus on industrial products and renewable energy industries.
Besides, MSSB believes investors may take the opportunity within the construction, property and building materials segment heading into the tabling of Budget 2024 next month.
The FBMKLCI ended lower while maintaining above the 1,450 psychological level.
Also, the technical readings on the key index were mixed. The MACD Histogram has extended another positive bar, while the RSI dropped below 50. The resistance is located around 1,465-1,470 and the support is envisaged around 1,430-1,440.
