CIMB Research advises investors to stay on sidelines

KUALA LUMPUR: CIMB Equities Research continues to advocate investors to stay on the sidelines this week to the sluggish technical outlook.

It said on Monday the FBM KLCI fell 27 points week-on-week as the escalating US-China trade tension dampened global market sentiment last week.

China immediately said in a statement that it is forced to retaliate after US tariff hike on more than US$200bil in goods from China took effect last Friday.

“Local bourse sank deeper and moved back below the previous downtrend line from the high of 1,732 last Friday. The technical outlook for the market remains sluggish as the key index is still trading below all of the EMAs.

“The index is currently retesting 1,610. A break below the critical 1,610-1,600 levels would be bearish for the market. Nevertheless, any positive news coming from the trade disputes is likely to trigger a significant rebound.

“The falling 30-day and 50-day EMAs will serve as an immediate resistance. We continue to advocate investors to stay on the sidelines this week,” it said.

CIMB Research said there was no change to its long-term bearish view on the index given that the final phase of KLCI’s 126-month cycle is still in progress, where selling pressure is likely to be at its strongest.

Source: TheStar