Trading to stay choppy

KUALA LUMPUR: The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) started the week lower on a lower note, taking cue from the losses on Wall Street last week. At 10.10am, the benchmark index fell 6.22 points to 1,211.17. Turnover was 110 million shares valued at RM100.2mil. There were 101 gainers, 247 losers and 159 stocks unchanged.

Among the 30 stocks in the FBM KLCI, CIMB fell 8 sen to RM11.08, Genting Bhd shed 10 sen to RM7.03 while Sime Darby was 4 sen lower at RM8.54. Nestle (M) Bhd was the top gainer, adding 34 sen to RM35.30 while Jadi Imaging was the most active with 6.5 million shares done, adding 1 sen to 21.5 sen.

HwangDBS Vickers Research said investors would like take time to warm up before gradually turning more active in the stock market ahead given last week’s holiday and shortened trading week. It added that there have been few material developments over the past one week or so for investors to response to. “Given this scenario, we reckon that our Malaysian bourse may show a slight downdraft today. “Just like on Wall Street, its major equity indices slipped between 0.4% and 0.8% at the closing bell on Friday on profit-taking pressures amid disappointing economic data,” HwangDBS said.

“Beyond the short-term lull, we still expect the benchmark FBM KLCI to trend up, possibly testing its resistance mark of 1,230 points again. On the downside, its immediate support level is seen at 1,190,” it added. Kenanga Research said while the primary trend remained up, technically the KLCI looked to be “in need of some consolidation after running up” since the temporary low in August.

Its short term cautiousness was based on the short term moving averages namely the 30 days and 50 days were flattening out indicating perhaps some possible loss in upside momentum. It added that the daily RSI was also rolling over, lending strength to a possible corrective pullback and consolidation and development of a negative divergence. Kenanga said the upside resistance could be expected at the 1,225 to 1,250 levels with 1,200 to 1,190 acting as the immediate support.

“Do look out for possible quarter-end window dressing activities to lend support to the index in the near term offering top-slicing opportunities,” it said, adding that it preferred the mid to lower liners which were trading at undemanding valuations.