FTSE Bursa Malaysia KLCI (.KLSE) Expected to remain weak

FTSE Bursa Malaysia KLCI (.KLSE) Expected to remain weak

FTSE Bursa Malaysia KLCI (.KLSE) Expected to remain weak

Bursa Malaysia is expected to remain weak this week as banking- related stocks are especially impacted, with the focus on the overnight policy rate (OPR) to be released by Bank Negara Malaysia (BNM). Shayne Heffernan, CEO and Founder of Heffx said the FBM KLCI would likely oscillate around the 1,624 and 1,640 levels with support seen at 1,596 points.

“The market is quite fragile as foreign funds have been net sellers for quite sometime now. “Lower crude palm oil prices, weak results from telcos and a possible cut in OPR will see prospects for the FBM KLCI being quite dim for now,” he said in a note.

He said the BNM will hold its Monetary Policy Committee (MPC) meeting on May 7. “We expect the central bank to reduce the OPR by 25-basis points in a bid to spur economic activities. “The Reserve Bank of Australia (RBA) will also announce its decision on policy rates on the same day.

The market consensus is for the RBA to cut the cash rate by 25-basis points to 1.25 per cent,” Shayne Heffernan added.

During the week just-ended, Bursa Malaysia traded mostly lower in the absence of positive catalysts to spark buying interest, while the weaker sentiment was also clouded by insipid global economic growth. On a Friday-to-Friday basis, the benchmark FBM KLCI settled 1.08 points lower at 1,637.30. 

The market was closed on Wednesday in conjunction with Labour Day.

The FBM Emas Index fell 54.05 points to 11,611.76, the FBMT 100 Index eased 45.16 points to 11,431.96 and the FBM Emas Shariah Index slid 106.15 points to 11,779.77. 

The FBM Ace Index declined 147.81 points to 4,646.03 and the FBM 70 shrank 209.34 points to 14,521.39. 

Sector-wise, the Financial Services Index improved 51.47 points to 16,932.93, the Plantation Index eased 96.60 points to 7,201.87 and the Industrial Products and Services Index fell 2.67 points to 169.34. Weekly turnover dropped to 10.39 billion units valued at RM7.94 billion against 19.50 billion units valued at RM13.10 billion last Friday.

Main Market volume slipped to 7.51 billion shares worth RM7.36 billion against 15.56 billion shares worth RM12.36 billion. Warrants turnover eased to 1.45 billion units valued at RM347.61 million from 1.87 billion units valued at RM342.41 million. The ACE Market volume was lower at 1.41 billion shares valued at RM232.15 million versus 2.06 billion shares valued at RM397.52 million

Overall, the bias in prices is: Downwards.

The projected upper bound is: 1,652.35.

The projected lower bound is: 1,609.70.

The projected closing price is: 1,631.03.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with FTSE BURSA KLCI) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with FTSE BURSA KLCI) it is called a bullish hammer.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 41.6272. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.79. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 23 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -5. This is not a topping or bottoming area. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 8 period(s) ago.

Rex Takasugi – TD Profile

FTSE BURSA KLCI closed down -4.500 at 1,632.800. Volume was 42% below average (neutral) and Bollinger Bands were 47% narrower than normal.

Open High Low Close Volume___
1,632.0401,633.6601,623.6101,632.800 66,593,500

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1,634.36 1,656.54 1,710.73
Volatility: 7 8 11
Volume: 106,139,856 109,921,808 126,209,072

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FTSE BURSA KLCI is currently 4.6% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .KLSE at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .KLSE and have had this outlook for the last 4 periods.

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