The Malaysia stock market has moved higher in two of three trading days since the end of 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 1,456-point plateau and it’s expected to see little movement again on Monday.
At 9.25am, the FBM KLCI opened at 1465.86.
RHB Retail Research, in a note today (Sept 4), said the FKLI gapped down last Friday and closed at 1,439 pts – eyeing to climb above the 200-day SMA line.
On Friday, the index began trading at 1,435 pts. Initially, it fell to the day’s low at 1,433.50 pts but rebounded towards the day’s high at 1,443.50 pts and closed at 1,439 pts – charting a bullish candlestick.
However, the index has yet to cross above the long-term moving average line.
In the event the positive momentum follows through, the index may test the immediate resistance at the 1,450-pt level.
Breaching above the 1,450-pt resistance will weaken the Bearish Marubozu and the Bearish Engulfing candlesticks.
As long as the index trades below the stop-loss point, RHB will retain the bearish bias.
RHB recommends traders to retain the short positions initiated at 1,447.50 pts, or 17 Aug’s close.
To mitigate the trading risks, the stop-loss is set at 1,468.50-pt level. The first support remains unchanged at 1,430 pts, followed by 1,400 pts.
Towards the upside, the nearest resistance is revised to 1,450 pts, followed by 1,468.50 pts, or the high of 1 Aug.
Malacca Securities (MSSB) said the FBM KLCI (+0.79%) ended higher, with strong buying interest in the Telco Sector (+1.29%) in contrast with the sell down on Wednesday. The strong market performance was in conjunction with the PM’s NIMP 2030 announcement.
The Energy Sector (+2.46%) was the leading sector of the day amid firmer oil price.
The FBMKLCI managed to close firmer with the buying support within the Telco heavyweights. Given the Wall Street traded higher for the first day of September, it is likely the buying interest may spillover towards stocks on the local front, especially the Technology sector. We believe the softer-than-expected jobs data last week suggested that the Fed may hold on to the current interest rate environment and may provide upside potential towards the stock markets.
Meanwhile, MSSB believes the overall local bourse may stay bullish with the launching of NETR and NIMP 2030 over the past few weeks.
Commodities wise, the Brent crude oil experienced a breakout above USD87/bbl, while the CPO prices marked higher above RM4,000/MT.
Sector focus: MSSB still favours the Technology sector given the positive performance on Wall Street overnight, while the local trading activities may trade on a vibrant note following the launches of several blueprints such as NETR and NIMP. They like the Construction, Properties, Building Material, Renewable Energy-related and Industrial Products.
Also, MSSB expects trading interest within the O&G sector to remain exciting with the surge in Brent oil prices above USD88.
The FBMKLCI continues to trade on a firmer note, closing above the 1,460 level. The MACD Histogram has formed a rounding bottom formation, while the RSI is hovering above 50. Hence, MSSB expects the FBMKLCI to surge and breakout above the resistance moving forward, targeting 1,470-1,480. Support is located around 1,450.
