The FBMKLCI Index extended the current recovery for three consecutive days with a stronger performance across global equities markets yesterday. At day’s end, the benchmark index rose 6.60pts, or 0.47%, to 1,398.06pts, led by advancers PCHEM, PMETAL, CDB and SIME.
At 9.10am, the FBM KLCI opened at 1398.06.
RHB Retail Research, in a note today (July 13), said the FKLI climbed above the 1,400-pt psychological resistance to close stronger at 1,402 pts – charting the third consecutive positive closing.
The benchmark index began yesterday’s session at 1,394 pts. Initially, it fell to the 1,392 pts day low, then rose towards the 1,403 pts day high before closing in positive territory – crossing above the 50-day SMA line.
The index reclaimed the medium-term moving average line, enhancing the current counter-trend rebound. This also affirmed that the bulls are in the driver’s seat now – eyeing to test the 1,410.50-pt resistance.
Breaching the immediate resistance will open the door for upside movement towards the 1,440-pt level. The RSI is trending higher now, suggesting a follow-through of positive price action for the immediate sessions.
As the positive momentum is gaining speed, RHB will keep the bullish bias unchanged.
RHB recommends traders to retain the long positions initiated at MYR3,743 or the close of 16 Jun. To manage the trading risks, the stop-loss threshold is placed at MYR3,654.
The nearest support has been revised to MYR3,789 – 30 Jun’s close – followed by MYR3,654, ie the low of 28 Jun.
Conversely, the first resistance is set higher to MYR4,000, and followed by MYR4,200.
Maybank Investment Bank said market breadth, however, remains positive with gainers continuing to outnumber losers by 490 to 347. A total of 2.81b shares valued at MYR1.72b changed hands.
Buying interest picked up pace across the board with both small caps and blue chips stocks leading the mid-cap and ACE market as the investment bank expects the current recovery phase to continue, at least in the near term.
Technically, Maybank IB expects the FBMKLCI Index to range between 1,390pts and 1,420pts today, with supports remaining at 1,370pts and 1,350pts.
CGSCIMB said the local benchmark FBMKLCI (KLCI) rose another 6.60pts or 0.47% to end the day at 1,398.06.
The broader market continued its rally with the largest gains coming from energy (+1.45%), industrial products (+1.39%) and construction (+1.04%).
The only laggards for the day were healthcare (-0.48%) and plantation (-0.08%).
Trading volume eased slightly to 2.82bn (down from 2.83bn on Tuesday) while trading value improved to RM1.73bn (down from RM1.86bn previously).
Market breadth stayed positive three days in a row as 490 advancers beat 347 losers. The benchmark climbed further and formed its third consecutive white candle yesterday.
Prices tested the 1,400 psychological mark after its breakout above the resistance trend line from the 1,494 high.
A firm close above the said psychological level (including the 50-day EMA) today would be a short-term positive for the index.
The 1,416 level is the next resistance. Conversely, breakdown below 1,376 would likely put the index on course for 1,355-1,360 next.
CGSCIMB’s portfolio stays in risk-off mode this week.
