FBM KLCI may sway sideways with a marginal negative

FBM KLCI may sway sideways with a marginal negative bias for the time being. This could be inferred if a minor downward sloping pattern – which remains sketchy at this early stage – develops further (see picture overleaf). Under this scenario, the bellwether is expected to reverse since it is now hovering at the upper part of the channel.

If that is the case, then our first support line of 1,255 appears vulnerable. A drop below will probably send the benchmark index towards the next support level of 1,230. However, given the prevalence of little panic selling thus far, it is tempting to say that the FBM KLCI could have bottomed already after bouncing up from its recent trough of 1,224.37 (touched on 9 Feb). On the other hand, its positive trend – which is still intact, in our view – is not likely to resume just yet until the index climbs beyond the first resistance mark of 1,280.