The Malaysia stock market on Wednesday wrote a finish to the three-day winning streak in which it had gathered more than 25 points or 1.6 percent.
The Kuala Lumpur Composite Index now rests just above the 1,660-point plateau and it may take further damage on Thursday.
RHB Retail Research (RHB) in a note today (Sept 19) said the FKLI is taking a minor pause on the upside movement after declining 2 pts to close lower at 1,660 pts.
On Wednesday, the index began trading at 1,664.50 pts.
It then fell to the 1,654 pts day's low before closing at 1,660 pts.
Although it experienced profit-takings, the bullish setup remains intact. The index is still trending higher above both the 50- and 200-day SMA lines.
Meanwhile, RHB observed strong support has formed at the 1,630-pt level.
In the event selling pressure increases, the index may consolidate towards the 1,630-pt support level. Post consolidation, the index should resume the upside movement.
As long as the index stays above the 1,630-pt threshold, we will retain the positive trading bias.
Traders should hold on to the long positions initiated at 1,565.50 pts (the close of 6 Aug).
To minimise the trading risks, the trailing-stop threshold is fixed at 1,630 pts.
The first support remains unchanged at 1,630 pts, followed by 1,600 pts.
On the upside, the first resistance is still pegged at 1,673.50 pts – 29 Aug's high – followed by 1,700 pts.