The Malaysia stock market has moved higher in back-to-back sessions, picking up almost 5 points or 0.3 percent along the way. The Kuala Lumpur Composite Index now sits just above the 1,445-point plateau and it may add to its winnings on Tuesday.
At 9.20am, the FBM KLCI opened at 1442.05.
RHB Retail Research, in a note today (Aug 8), said the FKLI firmed up its uptrend structure above the 200-day SMA line yesterday, closing 3.50 pts higher at 1,446.50 pts, amid partial profit-taking. Despite opening lower at 1,440 pts, it rebounded strongly towards the 1,454.50 pts high before partial profit-taking at the close.
This positive rebound suggests further upwards movement above the long-term SMA line.
For the immediate session, the FKLI should rebound strongly towards the 1,468.50 pts resistance. Breaching above this level would negate the previous Bearish Engulfing pattern – potentially RHB recommends that traders maintain the long positions initiated at 1,389 pts, ie the close of 16 Jun.
To minimise the trading risks, the trailing-stop is set at 1,430 pts. The immediate support is at 1,430 pts, followed by 1,400 pts. Conversely, the immediate resistance is still at 1,468.50 pts (1 Aug’s high), followed by 1,500 pts threshold.
Supported by the higher low bullish pattern above the long-term SMA line, RHB’s trading bias remains bullish.
RHB recommends that traders maintain the long positions initiated at 1,389 pts, ie the close of 16 Jun. To minimise the trading risks, the trailing-stop is set at 1,430 pts.
The immediate support is at 1,430 pts, followed by 1,400 pts. Conversely, the immediate resistance is still at 1,468.50 pts (1 Aug’s high), followed by 1,500 pts. Maybank Investment Bank (Maybank IB) said the FBMKLCI Index opened the week on a positive note despite a mixed performance across regional equities markets amid caution over upcoming China inflation data this week.
At day’s end, the benchmark index eked out a 0.60pt gain, or 0.04%, to close at 1,445.81pts, led by advances in HLFG, PPBGROUP, QL and KLK.
Market breadth remained negative as losers outnumbered gainers by 482 to 330. A total of 3.13b shares valued at MYR1.34b changed hands. Buying interest emerged in construction and transportation names while the utilities sector index continued to surge higher yesterday.
Technically, Maybank IB expects the FBMKLCI Index to range between 1,435pts and 1,465pts today, with supports at 1,413pts and 1,396pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.04%) ended on a flattish note after a lacklustre trading session with half of the key index constituents closed in green. The lower liners ended marginally lower, while the healthcare sector (-1.0%) underperformed the mixed sectorial peers.
The local bourse ended relatively unchanged as investors are staying on the sidelines ahead of this weekend’s state elections. We expect the muted trading sentiment to extend in coming days on the back of the absence of fresh leads.
The lower liners may also experience similar movement as uncertainty over the outcome of Malaysia’s state election persists.
Going forward, the key focus will be on the release of Malaysia’s industrial production data later today.
Meanwhile, the improved market sentiment on Wall Street may see mild upsides permeating towards stocks across Bursa Exchange.
Commodities wise, the Brent crude oil took a step back below USD86/bbl, while the CPO prices slipped below RM3,800/MT.
Sector focus: The approval of 57 Air Traffic Rights (ATR) applications in the 2Q23 may buoy the aviation and tourism-related sector. The positive developments on Nasdaq overnight may prop trading interests within the technology sector.
On the other hand, MSSB expects a pullback in the plantation sector in line with the weaker CPO prices.
The FBM KLCI ended flat, forming a doji candle to maintain above daily SMA200. Technical indicators remained mixed as the MACD Histogram extended another negative bar, while the RSI treaded above 50. The immediate resistances are located along 1,460-1,480, while the support is pegged around 1,400-1,420.
CGS-CIMB said the local benchmark FBMKLCI (KLCI) tried to rebound but could not sustain the gains, closing a mere 0.60pts or 0.04% higher to end the day at 1,445.81.
Most sectors closed positive with construction (+0.63%), utilities (+0.55%) and plantation (+0.42%) leading the gainers. The laggards were led by healthcare (- 0.99%), technology (-0.39%) and property (-0.18%).
Trading volume rose to 3.13bn (up from 2.68bn on Friday) while trading value fell further to RM1.34bn (down from RM1.42bn previously). Market breadth swung back into negative as 482 decliners beat 330 gainers.
The benchmark tested the 1,450 psychological levels yesterday but the bulls lacked oomph. The benchmark is likely to retest the 200-day EMA again in the coming days given the lack of strength in the current rebound.
Further consolidation is likely IF the benchmark fails to hold above the 1,430-1,438 band. The 50-day EMA (currently at 1,416) is the next likely destination if the said band cannot hold up.
On the upside, a double resistance of the downtrend line from the 1,527 high and the historical 1,460-1,465 band is likely to keep the bulls in check for now. The next resistance is at 1,476-1,480. CGS-CIMB’s portfolio stays in risk-on mode this week.
