The FBMKLCI (-0.05%) ended marginally lower as profit taking activities were seen within selected telco and consumer heavyweights on Monday.
On the broader market, profit-taking activities emerged within the Construction (-1.14%) & Utilities (-1.05%), sectors, but the Industrial Products sector (+0.71%) gained for the day.
At 9.10am, the FBM KLCI opened at 1462.72.
RHB Retail Research, in a note today (Sept 5), said the FKLI climbed above the 200-day SMA line on Monday despite writing off most of its intraday gains – it settled 2.50 pts higher at 1,441.50 pts.
The index began trading at 1,439.50 pts. Its movement then jumped strongly towards the 1,446.50-pt high before retraced sharply in the afternoon to close in positive territory.
Although the index climbed above the 200-day SMA line, the overall technical setup remains bearish, with a “lower high” pattern formed below the 1,450-pt resistance and a declining RSI at the 49% level.
RHB anticipates the rebound to be short-lived, with strong selling pressure emerge near 1,450 pts – likely pushing the index’s movement back below the long-term SMA lines and towards the 1,430-pt support. Unless the rebound accelerates beyond the stop-loss point, RHB maintains a bearish bias.
RHB recommends traders retain the short positions initiated at 1,447.50 pts or 17 Aug’s close. To mitigate the trading risks, the stop-loss threshold is set at 1,468.50 pts.
The first support remains unchanged at 1,430 pts, followed by 1,400 pts. Towards the upside, the nearest resistance is pegged at 1,450 pts and followed by 1,468.50 pts, which was the high of 1 Aug.
Malacca Securities (MSSB) said after a significant run in the lower liners, the market stayed muted yesterday. MSSB expects the consolidation may continue for the near term as (i) Australia (Tue) and Malaysia (Thurs) will announce the interest rate decision this week, (ii) China’s PMI and export data will be released, and (iii) Australia’s GDP will be released tomorrow.
Hence, the traders may trade cautiously ahead of these events. Should there be any further slowdown of the China economic activities, that may dampen the risk appetite on the stock markets.
Nevertheless, the domestic catalysts such as both the NETR and NIMP blueprints may support the local stock markets at least for the near term.
Commodities wise, the Brent crude oil traded above the USD88/bbl, while the CPO prices are trading in a consolidation phase below RM4,000/MT.
Sector focus: MSSB still likes the industrial products and services sectors, especially the building material segment with the NIMP 2030 blueprint. Meanwhile, MSSB likes the construction in the anticipation of more contracts to be released going forward, while the energy stocks should flourish in tandem with the firmer crude oil prices.
The FBMKLCI traded flat, but still closed above the 1,460 level. The MACD Histogram has formed a positive bar, while the RSI is hovering above 50. Given the technical readings are positive, we believe the FBM KLCI may continue its upward tone in the near term. Resistance is at 1,470-1,480, while the support is envisaged around 1,440-1,450.
CGS-CIMB said the local benchmark FBMKLCI (KLCI) inched down 0.71pts or 0.05% to end the day at 1,462.72. Profit-taking seen across the board with construction (-1.14%), utilities (-1.05%) and telecommunications (-0.67%) taking the lead.
On a positive note, industrial products (+0.71%), energy (+0.57%) and REIT (+0.38%) were the top gainers.
Trading volume fell to 4.01bn (down from 4.66bn on Friday) while trading value decreased further to RM2.37bn (down from RM3.08bn previously).
Market breadth turned negative as 498 gainers lost out to 526 losers. The bulls took a breather yesterday after testing the 1,465 resistance.
The odds are still in favour for the bulls to push on from here as prices appear to be holding well above the falling trend line from the 1,527 highs.
CGCIMB expects the benchmark to see follow-through buying in the next few days. A close above 1,465 may see the index push higher towards 1,476-1,485 next.
However, failure to push through and falling back below last Wednesday’s low of 1,452 warns that the current sideways chop may be carry on for another week or so.
The rising 50- day EMA, together with the 1,430-1,438 band remains the key support in the near term. CGSCIMB’s portfolio stays in risk-on mode this week.
