The Malaysia stock market has finished higher in three straight sessions, gathering more than 10 points or 0.7 percent in that span. The Kuala Lumpur Composite Index now rests just above the 1,435-point plateau although it may be stuck in neutral on Wednesday.
At 9.20am, the FBM KLCI opened at 1431.92.
RHB Retail Research, in a note today (April 12), said the FKLI printed a stronger rebound yesterday, climbing 7 pts to settle at 1,435 pts as it eyes the 50-day SMA line. The index opened at 1,426 pts and moved upwards to hit the 1,437-pt high before the close.
The three consecutive sessions of upward rebounds indicate that the FKLI is poised to climb towards the 1,445-pt immediate resistance in the coming sessions.
The strengthening of the RSI at the 54% level from 51% also indicates potential upward movements in the coming sessions. If a breakout above that level happens, it will also negate the previous “Dark Cloud Cover” bearish pattern – indicating that the bulls are dominant.
Nevertheless, since the 50-day SMA line is pointing downwards, indicating that the major downtrend remains intact, the rebound is set to be capped at the 1,445-pt immediate resistance.
As such, RHB sticks to their negative trading bias unless a breakout happens, saying traders should maintain the short positions initiated at 1,414 pts, ie the close of 10 Mar.
To minimise the trading risks, the initial stop-loss threshold is set at 1,445 pts.
The immediate support is still at 1,412 pts – 17 Mar’s close – and followed by 1,400 pts. Towards the upside, the immediate resistance is pegged at 1,445 pts – 7 Mar’s high – and followed by 1,476 pts or the close of 17 Feb.
Meanwhile, Maybank Investment Bank cited the FBMKLCI Index rising for the second day, driven by stronger interest in commodity related stocks in tandem with generally stronger performance across the regional equities markets.
The benchmark index rose 7.76pts or 0.54%, to close the day at 1,435.89, led by advances in PMETAL, QL, DIALOG and MRDIY.
Market breadth turned positive, boosted by overnight gains in the US equities market with gainers outnumbering losers by 535 to 321. A total of 3.06b shares valued at MYR1.84b changed hands.
After consolidation for the past eight days, the telco sector staged a breakout yesterday while both energy and plantation names are set to extend the recent rally. “Technically, we expect the FBMKLCI Index to range between 1,425pts and 1,455pts today, with supports remaining at 1,380pts and 1,350pts.”
