Ahead of Thursday’s holiday for National Day, the Malaysia stock market turned lower again – one day after ending the two-day losing streak in which it had given up less than a single point. The Kuala Lumpur Composite Index now rests just above the 1,450-point plateau and it’s expected to see little movement again on Friday.
At 9.15am, the FBM KLCI opened at 1461.52.
RHB Retail Research, in a note today (Sept 1), said the FKLI printed a bullish candlestick on the last trading session of August, gained 3.50 pts and closed at 1,457.50 pts.
After opening at 1,453.50 pts on Wednesday, the index rose to the day’s high of 1,463.50 pts before closing at 1,457.50 pts. The latest bullish candlestick has penetrated the Bearish Marubozu, thereby weakening the bearish setup.
The RSI is trending higher, which indicates that the bullish momentum is picking up pace. In the event the index breaches the 1,468.50-pt resistance, the market sentiment will improve.
Before that happens, expect strong selling pressure emerge at the immediate resistance. Since the immediate resistance or the stop-loss point remains intact, RHB will hold on to a bearish bias.
RHB advises traders to maintain the short positions initiated at 1,447.50 pts or 17 Aug’s close. To manage trading risks, the initial stop-loss is at the 1,468.50-pt level.
The nearest support is at 1,430 pts, followed by 1,400 pts. On the other hand, the first resistance is at 1,468.50 pts (1 Aug’s high), followed by 1,500 pts. Malacca Securities (MSSB) said the FBM KLCI (-0.17%) ended with a mixed tone, with profit-taking seen within the Telco and Media heavyweights; Axiata Group Bhd and CelcomDigi Bhd were the laggards within the sector.
Meanwhile, the Technology (+1.44%) and Property (+1.12%) sectors were the leading sectors of the day.
The FBMKLCI traded softer prior to the public holiday as profit taking activities emerged. Meanwhile, the Wall Street traded mixed as the heavy-technology-Nasdaq index gained momentum despite the core PCE ticked higher this month, but it was within market’s expectations.
MSSB believes traders will be monitoring more clues from the August payroll that will be out later today. Should the payroll data come in below expectation, it will provide the Fed reason to pause further on the interest rate hike.
On the local front, MSSB expects greater trading activities, supported by the news flow regarding the National Industrial Master Plan (NIMP). Commodities wise, the Brent crude oil surged above USD86/bbl, while the CPO prices marked higher above RM4,000/MT.
Sector focus: MSSB favours the Technology sectors on the local front with the positive overnight Nasdaq performance. Meanwhile, the stock broking house is likely to see a broad positive trading interest with the anticipation of more clarity on the NIMP. Hence, besides the Technology sector, positive trading activities may flow within the Construction, Building Material, Renewable Energy-related and Industrial Products.
Following the breakout last Tuesday, the FBMKLCI has taken a breather after hitting the intraday high of 1,463. However, we think the momentum is still intact with the positive technical indicators – MACD Histogram is recovering, while the RSI is above 50. The resistance is envisaged around 1,460-1,465. Support is set around 1,430-1,440.
