The Malaysia stock market on Thursday snapped the four-day winning streak in which it had advanced more than 20 points or 1.3 percent. The Kuala Lumpur Composite Index now sits just beneath the 1,460-point plateau although it may bounce higher again on Friday.
At 9.15am, the FBMKLCI was at -0.46 points lower to open at 1,458.47.
RHB Retail Research, in a note today (Aug 11), said the FKLI’s movement saw profit-taking yesterday, as the index closed 2.50 pts lower at 1,462 pts despite recovering most of the intraday losses.
Its movement opened softly at 1,464 pts before sharply dipping to the 1,454-pt low, rebounding strongly to close just below the opening.
The initial profit-taking activities suggests a pullback, yet the medium-term outlook remains positive. This is supported by the RSI above the 50% positive territory, alongside the rising 50- and 200-day SMA lines.
Despite this temporary pullback, RHB maintains their bullish stance after considering the overall trend.
RHB recommendS traders keep to the long positions initiated at 1,389 pts, ie the close of 16 Jun. To minimise the trading risks, the trailing-stop threshold is set at 1,430 pts.
The immediate support is marked at 1,430 pts and followed by 1,400 pts. Conversely, the immediate resistance is still at 1,468.50 pts – 1 Aug’s high – and followed by 1,500 pts.
Maybank Investment Bank (Maybank IB) said the FBMKLCI Index managed to recoup earlier losses but still ended the day in negative territory in tandem with a mixed performance in regional markets amid cautious sentiment ahead of US CPI data.
At day’s end, the benchmark index fell 3.10pts, or 0.21%, to close at 1,458.93pts, led by decliners SIME, IOICORP, TM and SIMEPLT.
Market breadth turned negative with losers outnumbering gainers by 464 to 358. A total of 2.92b shares valued at MYR1.82b changed hands.
Domestic sentiment turned cautious amid profit-taking in both banking and plantation names. Selective interest however was spotted in the construction, consumer and utilities sectors after extending the recent rally yesterday.
Technically, Maybank IB expects the FBMKLCI Index to range between 1,450pts and 1,470pts today, with supports at 1,413pts and 1,396pts.
Malacca Securities (MSSB) said the FBM KLCI (-0.2%) pared some of its gains from previous session, dragged down by pullback in selected banking and plantation heavyweights yesterday.
The lower liners also edged lower, while the plantation sector (-1.0%) underperformed the mostly negative sectorial peers.
With China slipping into the deflationary mode last month, the FBM KLCI was pressured lower before quick bargain hunting activities, which cushioned the downside move yesterday.
As the Malaysia state elections approaches over the weekend, MSSB expects trading activities to remain cautious. The lower liners may also set for a rangebound trading with the on-going corporate reporting season. Given that the US inflation has moderated, MSSB reckons that Wall Street may head higher over the near term.
Going forward, investors will be monitoring the outcome of Malaysia state elections as well as the US producer price index data to be released tonight.
Commodities wise, the Brent crude oil staged a pullback below USD87/bbl, while the CPO prices hovered above RM3,700/MT.
Sector focus: Reopening of the Green Energy Tariff (GET) programme by the Energy Commission (EC) is expected to benefit players involves in the renewable energy sector. On the flipside, the plantation sector may continue to struggle after palm oil inventories rose to a 5-month in July 2023.
The FBM KLCI managed to recover from its intraday low to close slightly lower as the key index and formed a hammer candle yesterday. Technical indicators remained mixed as the MACD Histogram extended another negative bar, while the RSI came off from the overbought territory. The immediate resistances are located along 1,480-1,500, while the support is pegged around 1,420-1,440.
