FTSE Bursa Malaysia KLCI (.KLSE) partially recovers as investors take stock of policy measures
The FBM KLCI retraced most of its losses after diving 26 points to a low of 1,456.08 in the morning session.
At 12.30pm, the index bounced higher to just 7.65 points in the red at 1,474.99 as investors took in the policy measures undertaken by global central banks to arrest the negative impact of the Covid-19 outbreak.
Regionally, financial markets stabilised on hopes that simulus measures announced in China and Japan and expected interest rate cuts in key economies such as the US and Australia would mitigate the slowdown in economic growth.
In Malaysia, robust trading volume on the market continued with 2.78 billion shares traded with a value of RM1.77bil. However, a bearish mood clearly dominated the session with 706 declining counters to 241 gainers and 287 unchanged.
A handful of heavyweight counters was seen responsible for much of the losses on Bursa Malaysia’s benchmark index.
Among the leading laggards, CIMB fell 14 sen to RM4.68, Petronas Chemicals dropped 16 sen to RM5.24, Digi shed nine sen to RM4.07, Sime Darby Plantation slid 14 sen to RM4.82 and Axiata lost 10 sen to RM4.08.
A rare silver lining was Tenaga Nasional, which bucked the trend with a strong advance of 50 sen to RM12.60.
Meanwhile, brewers continued to be the target of selling as investors considered their prospects in the wake of the new government administration.
Carlsberg dropped RM2.84 to RM29 while Heineken slid RM2.32 to RM23.18.
Oil markets rebounded strongly from multi-year lows on expectations that deeper Opec supply cuts and stimulus from central banks could help to shore up demand for the commodity.
WTI crude jumped US$1.41 to US$46.14 a barrel and Brent crude rose US$1.73 to US$51.40 a barrel.
On the forex market, the ringgit strengthened against key currencies amid hopes that interest rate cuts in the US could help to alleviate pressure on the emerging currency.
The local currency rose 0.25% against the US dollar to 4.2000, 0.3% against the pound sterling to 5.3844 and 0.1% against the Singapore dollar to 3.0201.
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 1,548.69.
The projected upper bound is: 1,498.76.
The projected lower bound is: 1,429.83.
The projected closing price is: 1,464.30.
A black body occurred (because prices closed lower 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 22 white candles and 28 black candles for a net of 6 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 31.0074. This is not an overbought or oversold reading. The last signal was a buy 4 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 26.54. 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 2 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 -143.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 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 5 period(s) ago.
Rex Takasugi – TD Profile
FTSE BURSA KLCI closed down -15.700 at 1,466.940. Volume was 103% above average (neutral) and Bollinger Bands were 62% 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: 1,507.87 1,561.90 1,598.62
Volatility: 19 14 11
Volume: 174,100,560 124,729,856 114,088,792
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 8.2% 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 volume flowing into and out of .KLSE at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .KLSE and have had this outlook for the last 25 periods. Our momentum oscillator is currently indicating that .KLSE is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.