The Malaysia stock market on Monday ended the five-day losing streak in which it had slipped almost 15 points or 1 percent. The Kuala Lumpur Composite Index now sits just above the 1,445-point plateau and it may add to its winnings on Tuesday.
At 9.15am, the FBMKLCI rose by +0.05 points to open at 1,446.44.
RHB Retail Research Market Dateline said today (Dec 12) the FKLI rebounded above the 50-day SMA line as it closed 4 pts higher at 1,445.50 pts yesterday. The index opened higher at 1,443.50 pts and whipsawed in a positive fashion between 1,442 pts and 1,448 pts, then closing above the opening level at 1,445.50 pts.
The latest positive price action to claim the 50-day SMA line signals that the index is attempting to rebound further ahead – likely to consolidate above the SMA line before climbing higher.
The RSI indicator now prints at 47% and is eyeing to enter the positive territory – signalling the momentum is shifting to positive. If the index manages to sustain above the rising 50-day SMA line, with further improvement of the momentum, it is likely to see the index testing the 1,468.50 pts immediate resistance in the later sessions.
However, falling below the SMA line would pose a correction towards the 200-day SMA line. As for now, RHB maintains a bullish bias.
Traders are advised to hold on long positions initiated at 1,455 pts, ie the close of 3 Nov. To mitigate the trading risks, the stop-loss threshold is set at 1,430 pts.
The first support is marked at 1,430 pts, followed by 1,410 pts. On the other hand, the immediate resistance is pegged at 1,468.50 pts – 1 Aug’s high – followed by 1,485 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.31%) closed higher snapping a 5-day losing streak, as investors tracked the positive performance from Wall Street last week.
On the broader market, the Utilities sector (+2.80%) rose, continuing the momentum backed by YTL-related counters, while the Energy sector (-0.42%) was the sole decliner.
The FBMKLCI rebounded on the support and snapped a 5-day losing streak with the emergence of broad market bargain hunting activities.
Meanwhile, the US stock markets continued with the upward momentum ahead of the important inflation data and the 2-day FOMC meeting this week.
MSSB believes the narrative on the CPI is significant to determine the interest rates direction going forward; thus, if the US CPI is cooling more-than-expectation, the Fed may turn less hawkish next year and potential rate cut could materialise during 1H2024.
At this juncture, MSSB believes the buying interest may continue to spillover towards stocks on the local front.
On the commodity markets, the Brent oil prices extended its rebound despite the demand concerns and worry on OPEC+ cuts may not be enough to keep the inventories low.
Sector focus: As expected, the YTL-related companies trended positively following the data centre collaboration news with NVIDIA and may spur trading interest in the Technology sector.
Besides, the plans to revive KL-SG HSR provide buying interest towards the Construction, Property, Building Material as well as Renewable Energy sectors.
Meanwhile, with the rebound in Brent oil prices, we may expect trading interest to build up within the O&G sector.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI rebounded from a 5-day losing streak. The technical readings on the key index are still negative. The MACD Histogram extended another negative bar, while the RSI is still hovering below the 50 level, with a slight up-tick.
The resistance is pegged around 1,460-1,465 and the support is at 1,430-1,440.
CGSCIMB said the local benchmark FBMKLCI (KLCI) rebounded 4.42pts or 0.31% to end the day at 1,446.39.
Most sectors ended in positive territory with the largest gains coming from utilities (+2.80%), property (+0.94%) and technology (+0.83%). The only laggards were energy (-0.42%) and transportation (-0.35%).
Trading volume boosted to 3.82bn (up from 2.99bn on Friday) while trading value improved to RM2.47bn (up from RM1.99bn previously).
Market breadth stayed positive as 483 gainers beat 397 decliners.
The benchmark formed a bullish engulfing candle yesterday, supported by bargain-hunting activities in banking heavyweights. The index managed to hold above the uptrend line from the 1,370 low and the 200-day EMA, which is an important cluster of support for the benchmark.
A minor bounce may continue here with a minor resistance at 1,450-1,454. The key resistance remains at 1,460-1,465 and a breakout above is positive for the immediate term.
Until then, it is still too early to be bullish on the benchmark. Hence, expect more sideways chop next.
The subsequent support is the 1,430-1,438 band and any weakness below this support level, warns that further consolidation lies ahead. CGSCIMB’s portfolio stays in risk-off mode this week.
