The FBMKLCI (+0.93%) closed higher despite the mixed performance of the regional markets, led by the rally in heavyweights such as YTLPOWR (+15.0 sen), SIMEPLT (+17.0 sen) and PBBANK (+6.0 sen).
On the broader market, the Property sector (+2.59%) was the top gainer, while the Healthcare sector (-0.88%) declined.
At 9.15am, the FBMKLCI dipped -0.72 points to open at 1,500.39.
RHB Retail Research in a note today (Jan 16) said the FKLI resumed its uptrend to reclaim the 1,500-pt threshold yesterday, surging 15 pts to close at 1,503.50 pts.
The index opened at 1,489.50 pts, then climbed towards the intraday high of 1,504.50 pts near the close.
The latest price action is in line with our anticipation, and opens the door for an upside movement.
The bullish breakout above the 1,500-pt level confirm that the FKLI has returned to a bullish pathway.
Also, both the 50-and 200-day SMA lines are still trending higher. This, coupled with an improved RSI near the 70% level, leads us to
maintain a bullish bias.
Traders should keep the long positions initiated at 1,455 pts, ie the close of 3 Nov 2023. To manage the trading risks, the stop-loss mark is fixed at 1,450 pts.
The immediate support is marked at 1,470 pts, followed by 1,450 pts. Conversely, the immediate resistance is pegged at 1,530 pts, followed by 1,570 pts.
The Day Ahead
Malacca Securities (MSSB) said the FBMKLCI experienced a strong flag formation breakout led by significant buying interest in YTL-related utilities and banking heavyweights.
Meanwhile, the US was closed for holiday break. Events that investors will be watching out this week include (i) earnings releases from Goldman Sachs and Morgan Stanley, (ii) monthly retail sales in the US, (iii) US unemployment claims and (iv) China Industrial Production
data.
On the local market, we expect overall sentiment to stay positive following the announcement of 7 consortia submitted RFI proposal for KL-SG HSR project.
On the commodity markets, the Brent oil price gained marginally higher amid rising tension in the Red Sea region.
Sectors focus: With the potential revival of the KL-SG HSR project, we opine that the overall Construction and Building Material sectors will be positive in the near term. We also favour the Property sector, where companies with land banks along the project may benefit. Meanwhile, the recent signing of the JB-SG SEZ agreement could provide upside towards investments in the Johor-region and may benefit the Renewable Energy and Water segments in the future.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI continued to rally after forming a flag formation. 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 1,510-1,520 and the support is set at 1,470-1,480.
CGSCIMB said most Asian stock markets finished higher on Monday while Japan’s Nikkei 225 (+0.91%) hitting fresh highs. The local benchmark FBMKLCI (KLCI) jumped 13.77pts or 0.93% to end the day at 1,501.11.
The broader market was largely positive with the largest gains coming from property (+2.59%), telecommunications (+1.37%) and utility (+1.28%). The only laggards were healthcare (-0.88%) and consumer products (-0.07%).
Trading volume rose to 4.98bn (up from 4.08bn on Friday) while trading value increased to RM3.13bn (up from RM2.84bn previously).
Market breadth stayed positive as 575 gainers outweighed 456 decliners.The benchmark gapped up and formed a long white candle yesterday.
Prices also closed at its 13-month high, heavily skewed in favour of the bulls. Further upside can be expected next with the KLCI attempting to break the 1,500-1,510 band again.
A breakout and a close above this band may take prices up towards the 1,521-1,527 levels next. IF there is no follow-through buying in the coming days, then look for a tad more sideways consolidation first before further upside takes place next.
We 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.
Our portfolio stays in risk-on mode this week.
