The Malaysia stock market has moved higher in back-to-back sessions, collecting almost 7 points or 0.5 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,455-point plateau although it may spin its wheels on Friday.
At 9.15am, the FBMKLCI rise +0.36 points to open at 1,457.57.
RHB Market Research in a note today (Dec 29) said the FKLI continued its upward rebound, extending above the 50-day SMA line yesterday by climbing an additional 3 pts to close at 1,458.50 pts.
This solidifies the positive rebound trend above the SMA line.
The session commenced at 1,456 pts and reached a high of 1,461.50 pts before experiencing a moderate retreat at the close whilst remaining in positive territory.
With two consecutive sessions of positive rebound above the SMA line, this suggests the FKLI is in the process of advancing higher towards the 1,474-pt level, although a period of sideways trading may precede a resumption of its upward movement.
The overall momentum remains positive, evident by the improved RSI, which is at the 53% level (in positive territory).
The rising SMA line beneath the prices indicates that the uptrend rebound remains intact. As such, we maintain our bullish trading stance.
Malacca Securities (MSSB) said the FBM KLCI (+0.22%) closed higher as investor confidence was still being boosted by the positive cue from Wall Street overnight, coupled with the window dressing activities.
On the broader market, the Technology sector (+0.75%) gained, while the Energy sector (-0.27%) fell.
The Day Ahead
The FBMKLCI extended the rebound for the second session as ongoing window dressing activities lifted the KLCI with buying support seen within the banking and plantation heavyweights.
Meanwhile, the US stock markets flirted along the all-time-high zone for the Dow and S&P500.
The expectation of 3 interest rate cuts next year by the Fed will continue to support the overall market conditions in the US, eventually spilling over towards the stocks on the local front.
Also, with the ongoing window dressing activities, should lift the FBM KLCI higher for the final day of the year.
On the commodity markets, Brent oil traded below the USD78/bbl mark as the latest government data showed inventory levels at Cushing have expanded, indicating a growing supply surpasses demand, while shipping firms are now resuming the Red Sea route as the area is being safeguarded by US-led maritime task force.
Sector focus: Given the overall positive market conditions in the US, we expect the buying support could be seen within the Technology sector.
From the buying flow yesterday, there are several sectors that were being traded higher, namely the Renewable Energy, Construction as well as selected Consumer stocks.
Besides, we like the Building Material, Property as well as some buying interest were observed within the Plantation sector.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended higher for the second consecutive day.
However, the technical readings on the key index were mixed, with the MACD Histogram extending another negative bar, while the RSI maintains above the 50 level.
The resistance is envisaged around 1,470-1,480 and the support is set at 1,440-1,450.
