Bursa Malaysia on Friday snapped the two-day slide in which it had slumped more than 15 points or 1 percent.
The Kuala Lumpur Composite Index now sits just beneath the 1,490-point plateau and it’s likely to be rangebound again on Monday.
At 9.15 am, the FBMKLCI rose +0.94 points to open at 1,488.28.
RHB Retail Research in a note today (Jan 15) said the FKLI managed to contain the selling pressure during Friday’s session, staging a 2.5 pts rebound to close at 1,488.50 pts.
The index initially opened at 1,486 pts and fell to the 1,479 pts day’s low.
It then rebounded to the 1,489 pts day’s high before the close – printing a bullish candlestick with long lower shadow.
The latest price action suggests correction phase may be coming to an end, opening the door for an upside movement.
In the event the index breaches above the 1,500-pt level, this will confirm the FKLI has returned to bullish pathway.
Meanwhile, both the 50- and 200-day SMA lines continue trending higher – improving the bullish setup.
For now, we will retain the bullish bias.
Traders should hold on long positions initiated at 1,455 pts, ie the close of 3 Nov 2023.
To control the trading risks, the stop-loss mark is placed at 1,450 pts.
The nearest support is marked at 1,470 pts, followed by 1,450 pts.
On the other hand, the immediate resistance is seen at 1,500 pts, followed by 1,530 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.29%) closed higher bucking the mostly negative performance of the regional markets, led by the rally in the Utilities heavyweights namely the YTL counters.
On the broader market, the Energy sector (+2.57%) was
the top gainer, while the Healthcare sector (-0.65%) declined.
The Day Ahead
The FBMKLCI rebounded after a two-day pullback with the support seen in selected Banking and YTL-related heavyweights.
Meanwhile, the US stock markets traded mixed with the mixed bag of bank earnings reports, while offsetting a cooler-than-expected PPI data which lifted the hopes for interest rate cuts by the Fed in Mar-24 to 72.2% from 58.2% a week ago, based on Bloomberg.
Closer to home, we believe the overall sentiment could remain positive as there are 5 consortiums that are
expected to present their proposal for the development of KL-SG HSR.
On the commodity markets, the Brent oil price gained marginally higher amid rising tension in the Red Sea region.
Sectors focus: With 5 consortiums bidding for KL-SG HSR projects, we believe this might provide buying support towards the Construction and Building Material
sectors. Meanwhile, we think the land and properties along the KL-SG HSR could benefit under this scenario, favouring the Property segment. Also, we opine that the
Johor-region investment could increase further going forward with the signing of JB-SG SEZ agreement, providing upside towards the Renewable Energy and Water segments.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI rebounded from 2 consecutive days of losses.
The technical readings on the key index were however mixed, with the MACD Histogram forming a rounding
top formation, while the RSI maintains above the 50 level.
The resistance is envisaged around 1,500-1,510 and the support is set at 1,470-1,480.
CGSCIMB said Asian stock markets finished mixed on Friday amid the release of hotter-thanexpected US inflation data. The local benchmark FBMKLCI (KLCI) recovered 4.34pts or 0.29% to end the day at 1,487.34.
Week-on-week, the index slid 0.27pts or 0.02%. The best performing sectors for the day were utilities(+2.57%), construction (+1.04%) and property (+0.52%). On the flip note, healthcare (-0.65%), plantation (-0.40%) and technology (-0.34%) were the top laggards.
Trading volume eased further to 4.08bn (down from 4.64bn on Thursday) while trading value tapered off to RM2.84bn (down from RM3.00bn previously).
Market breadth turned slightly positive as 492 gainers marginally beat 486 decliners.
The benchmark rebounded with a white candle last Friday, after its pullback from the 1,504 high. Friday’s close saw prices push above Thursday’s opening price, possibly signalling that the bulls want to lift prices again.
Further upside can be expected next, with the KLCI attempting to test the 1,500-1,510 levels again.
If there is no follow-through buying in the coming days, then look for a tad more sideways consolidation first before a rebound to the said resistance takes place.
CGSCIMB do not foresee a move below the 1,477 or 1,470 level but if the KLCI does so, then the immediate term outlook would turn slightly negative. CGSCIMB portfolio stays in risk-on mode this week.
