FTSE Bursa Malaysia KLCI (.KLSE) falls below 1,500 on political uncertainty
The FBM KLCI broke below the psychologically 1,500-point mark on Wednesday as the country’s political uncertainty drags on, amid announcement by Interim Prime Minister Tun Dr Mahathir Mohamad to put aside all politics and concentrate on resolving country’s economic issues.
In a televised address to the nation, Dr Mahathir said he wants a Cabinet comprising capable individuals that do not have to cleave to party affiliations.
At closing, the benchmark index pared some of its loss but closed 5.69 points lower at 1,495.19. The index opened 11.55 points lower at 1,489.33 this morning. There were 350 gainers, 538 losers while 393 counters closed unchanged. Turnover stood at 3.866 billion shares worth RM3.072bil.
In today’s session, 14 of the KLCI-component stocks were traded lower, 15 counters rose while the remaining closed unchanged. Dealers said the country’s political situation kept investors on tenterhooks. However, they are positive on news that Dr Mahathir will be announcing the economic stimulus package 2020 tomorrow in Putrajaya.
Earlier, Dr Mahathir attended a meeting with the Finance Ministry’s top officials in regards to the tabling of the economic stimulus package.
The stimulus package aims to stimulate Malaysia’s economy and mitigate any adverse repercussions arising from the COVID-19 outbreak and other external uncertainties.
Elsewhere in the region, Hong Kong stocks closed lower as fears grew over the rapidly spreading coronavirus outbreak outside china, though losses narrowed after the Asian financial hub rolled out stimulus to prop up its economy.
Reuters reported that the benchmark Hang Seng index fell as much as 1.54% in early trade following Wall Street’s sharp losses on growing fears of a global pandemic. The index later recovered some ground as investors cheered Hong Kong’s latest stimulus, finishing the day down 0.73%.
The Shanghai Composite index fell 25.12 points, or 0.83% to 2,987.93 while the blue-chip CSI300 index dropped more than 1.2% to 4,073.02.
South Korea’s KOSPI ended down 26.84 points, or 1.28%, at 2,076.77 while Japan’s Nikkei 225 lost 0.79% to 22,426.19, its lowest close since Oct. 15, 2019.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 1,557.74.
The projected upper bound is: 1,527.89.
The projected lower bound is: 1,459.45.
The projected closing price is: 1,493.67.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 21.3563. This is not an overbought or oversold reading. The last signal was a buy 1 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 29.88. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 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 -152.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 16 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.
Rex Takasugi – TD Profile
FTSE BURSA KLCI closed down -5.690 at 1,495.190. Volume was 84% above average (neutral) and Bollinger Bands were 16% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,524.43 1,567.70 1,600.88
Volatility: 17 14 10
Volume: 133,268,624 117,405,152 112,648,912
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.
FTSE BURSA KLCI is currently 6.6% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .KLSE (mildly bearish). Our trend forecasting oscillators are currently bearish on .KLSE and have had this outlook for the last 22 periods. Our momentum oscillator is currently indicating that .KLSE is currently in an oversold condition.