Bursa Malaysia on Friday snapped the three-day losing streak in which it had slipped nearly 25 points or 1.6 percent.
The Kuala Lumpur Composite Index now sits just above the 1,485-point plateau and it may see additional support on Monday.
At 9.15 am, the FBMKLCI rose +0.98 points to open at 1,487.35.
RHB Retail Research in a note today (Jan 22) said the FKLI managed to contain the selling pressure during Friday’s session, staging a rebound to close at 1,487.50 pts.
The index began trading at 1,480.50 pts. After setting its foothold at the day’s low at 1,478 pts, it climbed to the day’s high at 1,489 pts before the close.
The latest bullish session suggests that selling pressure is easing while the bulls are growing stronger.
The RSI is turning higher, echoing the positive momentum is re-accelerating.
In the event the momentum follows through – breaking past the 1,500-pt resistance – the consolidation phase is deemed completed.
For now, we retain the bullish trading bias.
Traders should hold on to the long positions initiated at 1,455 pts, or the close of 3 Nov 2023.
To minimise the downside risks, the stop-loss is fixed at 1,450 pts.
The nearest support is marked at 1,470 pts, followed by 1,450 pts.
Conversely, the nearest resistance is eyed at 1,500 pts, followed by the 1,530-pt level.
Malacca Securities (MSSB) said the FBMKLCI (+0.49%) closed higher, in line with the mostly positive regional markets, due to buying pressure in selected banking and utilities heavyweights.
On the broader market, both the Construction sector (+1.66%) and the Healthcare sector (+1.38%) were the top performing sectors.
The Day Ahead
The FBMKLCI rebounded after a 3-day pullback amid buying support in the Banking and Utilities segments. Meanwhile, the US stock markets ended stronger led by the chipmakers fuelled by optimism around the Artificial Intelligence theme; S&P 500 hit fresh record highs after 2 years.
This rally was followed by TSMC commenting that the outlook is encouraging with the booming demand for high-end chips used in AI. Currently the US 10-year Treasury yield stood at 4.126%, while the probability of a rate cut is declining.
On the commodity markets, the Brent oil price continues to traded sideways, ranging around US78-79/bbl, despite the ongoing tension in the Middle East.
Sectors focus: With the strong sustaining rally in the US, we expect buying interest to build up on the local exchange within the Technology sector. Also, we expect the small cap and lower liners to see bargain hunting activities in the near term after a few rounds of limit-down situations last week.
The focus will be on investment catalysts such as the revival of KL-SG HSR mega projects, rising focus on the Johor-region theme as well as easing requirements of MM2H going forward. Thus, traders should focus on the Construction, Property and Building Material segments.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI rebounded after the 3 days of consecutive losses. The technical readings on the key index were however mixed, with the MACD Histogram extending another negative bar, while the RSI maintains above the 50 level.
The resistance is envisaged around 1,510-1,520 and the support is set at 1,460-1,470.
CGSCIMB said Most Asian stock markets rebounded on Friday amid TSMC’s positive guidance led the gains in regional semiconductor shares.
The local benchmark FBMKLCI (KLCI) recovered 7.19pts or 0.49% to end the day at 1,486.37. Week-on-week, the index dropped 0.97pts or 0.07%.
All sectors were back into positive territory last Friday with the largest gains coming from construction (+1.66%), healthcare (+1.38%) and property (+1.28%).
Trading volume decreased to 5.39bn (down from 6.10bn on Thursday) while trading value fell to RM2.73bn (down from RM3.62bn previously).
Market breadth turned positive as 639 gainers beat 359 decliners. The benchmark rebounded and formed a white candle last Friday, sitting just above the 20-day EMA. The KLCI is likely to continue on its rebound from Friday’s swing low in the near-term.
The 1,500-1,510 band remains the immediate resistance for now. A breakout and a close above this said resistance band may take prices up towards the 1,521-1,527 levels next.
The 1,477 and 1,470 level are the immediate support. Any move below 1,470 would require us to re-evaluate our near-term bullish view for the benchmark.
Our portfolio stays in risk-on mode this week.
