The Malaysia stock market has tracked higher in back-to-back sessions, gathering more than 5 points or 0.3 percent along the way. The Kuala Lumpur Composite Index now sits just above the 1,450-point plateau although it may run out of steam on Wednesday.
At 9.19am, the FBM KLCI opened at 1450.26.
RHB Research, in a note today (Aug 23), said the FKLI attempted to rebound higher but faced intraday selling pressure, ending 2 pts weaker at 1,447 pts. Yesterday, the index opened lower at 1,448.50 pts, then climbed to test the high of 1,453.50 pts before profit-taking emerged. It then fell to close in negative territory, hitting 1,445.50 pts before the close.
The negative price action suggests the short-lived rebound above the 200-day SMA line may lead to a continued bearish momentum, aligned with the recent “Bearish Marubozu” candlestick pattern. RHB expects a sideways consolidation followed by correction towards the 1,430 pts. The weakening RSI strengthens RHB’s bearish trading bias.
Traders are recommended to stay on the short positions initiated at 1,447.50 pts (17 Aug’s close). To mitigate the trading risks, the initial stop-loss is fixed at the 1,468.50-pt level.
The immediate support is kept at 1,430 pts, followed by 1,400 pts. Conversely, the immediate resistance remains unchanged at 1,468.50 pts – 1 Aug’s high – followed by 1,500 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.07%) extended the rebound for the second day as buying interest was noticed within selected heavyweights such as PCHEM, IHH, and PMETAL. The FBM Small Cap and FBM ACE traded mixed for the session.
However, the technology sector ended on a firmer note led by MYEG and INARI.
Despite the local stock market ended higher for the earlier session, RHB believes the upside could be limited today as the market breadth has turned negative with only a handful of sectors charged higher.
Meanwhile, MSSB believes Wall Street may shift towards a cautious stance ahead of Nvidia’s result. Also, the rising US Treasury yields and Jerome Powell speech during the Jackson Hole meeting are crucial to watch out. Hence, the softer trading activities tone may emerge today, affecting the performance on the lower liners and small caps.
Commodities wise, the Brent crude oil continues to hover above USD84/bbl, while the CPO prices violated below RM3,900/MT.
Sector focus: Nevertheless, the still-positive mood on Nasdaq may provide some support towards the technology sector.
Meanwhile, MSSB expects the building material segment to sustain its upward mode throughout the near term following the built-up optimism on the construction and property sectors following the potential fresh proposal in KL-HSR.
The FBMKLCI extended the rebound for another session. Technical indicators are still mixed, with the MACD Histogram continues to stay in the negative region, while the RSI is hovering above 50. The key index may extend the rebound towards 1,460-1,465 resistance zone.
Meanwhile, the support is located around 1,430-1,440.
Maybank Investment Bank (Maybank IB) said the FBMKLCI Index gave back some of the earlier gains but closed on a higher note in tandem with bargain hunting across the regional equities markets.
At the day’s end, the benchmark index added 0.96pts or 0.07% to close at 1,451.53pts, led by advances in PMETAL, PCHEM, TM and HLFG. Market breadth remained negative with losers continuing to outnumber gainers by 490 to 432. A total of 3.30b shares valued at MYR1.93b changed hands.
Profit-taking could continue in both the property and utilities sectors while bargain hunting has begun in technology names.
Technically, Maybank IB expects the FBMKLCI Index to range between 1,440pts and 1,460pts today, with support at 1,440pts and 1,413pts.
