The Malaysia stock market has moved 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 1,445-point plateau and it may extend its gains again on Wednesday.
At 9.18am, the FBMKLCI dips -1.91 points to open at 1,445.2.
RHB Retail Research Market Dateline said today (Dec 13) the FKLI’s movement managed to stage a rebound yesterday despite facing strong selling pressure.
Most of the intraday gains were written off and the index’s movement settled just 1-pt positive at 1,446.50 pts – but still maintained above the rising 50-day SMA line.
The FKLI’s movement opened higher at 1,446 pts and then rose sharply towards the 1,452-pt intraday high before strong profit-taking activities kicked in.
Its movement then fell sharply to close just near the opening level. The neutral candlestick with long upper shadow indicates the failure of the recent rebound to persist and will likely see the FKLI consolidate near the SMA line in the sessions ahead.
If it manages to consolidate above the rising SMA line, the index has a high chance of resuming its rebound movement during later sessions. Falling below this line, however, poses a correction towards the 200-day SMA line.
RHB retains a bullish bias for now.
Traders are advised to hold on to the 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 and followed by 1,410 pts. On the upside, the immediate resistance is pegged at 1,468.50 pts – 1 Aug’s high – and followed by 1,485 pts.
Malacca Securities (MSSB) said the FBM KLCI (+0.05%) closed flat as investors were trading cautiously prior to the release of U.S. CPI data, and assessing the impact of the Cabinet reshuffling.
On the broader market, the Telco & Media sector (+0.91%) rose, while the Healthcare sector (-1.14%) declined, dragged by glove counters.
The FBMKLCI extended its rebound marginally higher, ending with a 2-day winning streak supported by Telco and Construction sectors. Over in the US, Wall Street maintained its upward tone, closing at 2023 fresh highs after inflation data, the US CPI came in within expectations at 3.1% YoY (excluding food and energy costs rising at 4.0% YoY).
Since the expectation on the CPI will be on a downward projection, the market could position for a less hawkish tone by the Fed and will be looking at a rate as early as May-24. With that, MSSB expects buying support to persist on the US and local stock exchange.
On the commodity markets, the Brent oil prices retraced after hitting resistance along USD76-77 amid demand concerns in China despite rising geopolitical tension after Iran-backed Yemeni militants attacked a tanker in the Red Sea.
Sector focus: With Wall Street headed for new 2023 new highs, and noticed Broadcom’s all time high position has lifted INARI and the buying interest should spillover towards the Technology sector.
Meanwhile, with the Malaysia cabinet reshuffling event, there will be positive anticipation within the Telco and Construction sectors. Traders may avoid the O&G stocks with the volatile move in the Brent oil prices.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended flat, maintained above the EMA60 level. The technical readings on the key index, however are still negative.
The MACD Histogram extended a less negative bar, while the RSI is hovering below the 50 level, albeit edging higher. The resistance is envisaged around 1,460-1,465 and the support is set at 1,430-1,440.
