The FBM KLCI remained bearish last week as sentiment remained bearish on generally bearish markets performances regionally.
There are no positive catalysts last week but weaker ringgit and falling crude oil prices affected the market negatively.
The index fell to its lowest since January 2017 last Wednesday before rebounding. The benchmark FBM KLCI eventually fell 1.1 per cent in a week to 1,661.96 points last Friday.
Trading volume has fallen significantly last week as the holiday season starts.
The average daily trading volume has declined to 1.9 billion from 2.3 billion shares in the previous week and the average daily trading value fell to RM1.7 billion from RM2.1 billion.
In the FBM KLCI, decliners beat gainers five to two. The top gainers were Hap Seng Consolidated Bhd (1.7 per cent in a week to RM9.88), Petronas Dagangan Bhd (1.2 per cent in a week to RM25.60) and Malaysia Airports Holdings Bhd (0.8 per cent to RM7.87).
The top three decliners were Tenaga Nasional Bhd (3.2 per cent to RM13.26), Digi.com Bhd (3.1 per cent to RM4.35) and Genting Bhd (three per cent to RM6.07).
Markets were mixed. In Asia, markets indices generally closed lower except for Hong Kong’s Hang Seng Index.
European markets including UK closed higher while the US market fell.
The Malaysian ringgit continued to strengthen against the green back at RM4.18 to a US dollar as compared to RM4.16 in the previous week.
The rebound in crude oil two weeks ago failed to trigger a rally. Crude oil (Brent Crude) declined 1.9 per cent in a week to US$60.25 per barrel last Friday.
Gold (COMEX) pulled back from a bullish trend and declined 0.9 per cent from the previous week at US$1,242.30 an ounce.
Locally, crude palm oil (BMD) rebounded and increased 3.5 per cent to RM2,068 last Friday.
The FBM KLCI broke below the immediate support level at 1,670 points last week and this preliminary indicates that the bearish trend is set to continue.
The current immediate resistance is at 1,702 points. Next support level for the index is at 1,620 points.
There is not much change in the current trend from the past two weeks.
Technically, the FBM KLCI trend remained bearish below the short term 30-day moving average and the long term 200-day moving average.
The index remained below the Ichimoku Cloud indicator and the expanding Cloud indicator downwards indicates that the bearish momentum continues to gain strength.
The RSI and Momentum Oscillator remained below their mid-levels and this indicates that the market is sentiment is still bearish in the short term.
These indicators have rebounded and this indicates that the bearish momentum weak.
However, the MACD has fallen below its trigger line and this indicates that the bearish momentum is building up.
As mentioned earlier, the breakout of the support level indicates that the bearish trend is set to continue.
Technical indicators are showing signs of stronger bearish momentum and therefore, the index may trend downwards towards the next support level at 1,620 points if it continues to stay below 1,702 points.
The above commentary is solely used for educational purposes and is the contributor’s point of view using technical analysis. The commentary should not be construed as an investment advice or any form of recommendation. Should you need investment advice, please consult a licensed investment advisor.
Source: Borneo Post Online