The benchmark KLCI suffered a major setback yesterday, falling below the 1,200 psychological level to close at 1,173.22. The heavy selling also triggered the circuit breaker in the afternoon session, reflecting the current bearish tone in the market.
While bottom fishing activities narrowed early losses, we reckon that the downdraft on the KLCI has yet to bottom out, and could ignite further profit taking. The MACD signal line has plunged further into negative territory, suggesting that any technical rebound would be short-lived. At this juncture, we believe a free fall below the 1,150 level could bring the KLCI towards the next suppor at 1,100. Therefore, investors should stay on the sidelines and avoid playing catch up.
While bottom fishing activities narrowed early losses, we reckon that the downdraft on the KLCI has yet to bottom out, and could ignite further profit taking. The MACD signal line has plunged further into negative territory, suggesting that any technical rebound would be short-lived. At this juncture, we believe a free fall below the 1,150 level could bring the KLCI towards the next suppor at 1,100. Therefore, investors should stay on the sidelines and avoid playing catch up.
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