Bursa Malaysia has moved higher in three straight sessions, collecting more than 15 points or 1 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,495-point plateau and it may open slightly to the upside again on Wednesday.
At 9.15am, the FBMKLCI rose +1.05 points to open at 1,497.16.
RHB Retail Research in a note today (Jan 24) said the FKLI’s movement continued its upward climb for a third consecutive session, edging 6 pts higher to close at 1,500 pts.
Starting higher at 1,494 pts, the index’s movement reached a high of 1,503.50 pts before retracing towards the 1,500-pt mark at the close.
This three-session positive momentum streak is solidifying the ongoing uptrend, which is poised to surpass the aforementioned 1,500-pt threshold and negating the Three Black Crows.
The RSI momentum indicator’s improvement to 62%, ie in positive territory, underscores the likelihood of sustained bullish activity.
As highlighted in our previous report, breaching the 1,500-pt threshold confirms the resumption of this uptrend.
Riding on the latest bullish momentum, we maintain our positive bias.
Traders should retain the long positions initiated at 1,455 pts or the close of 3 Nov 2023. To minimise the downside risks, the stop-loss is placed at 1,450 pts.
The nearest support remains unchanged at 1,470 pts and followed by 1,450 pts. The nearest resistance is pegged at 1,500 pts and followed by the 1,530-pt level.
Malacca Securities (MSSB) said the FBMKLCI (+0.33%) closed higher, in line with the mostly positive regional markets, due to buying pressure in selected Banking and Industrial Products heavyweights.
On the broader market, the Transportation & Logistics sector (+0.67%) was the top gainer, while the Healthcare sector (-0.70%) declined.
The Day Ahead
The FBMKLCI rebounded for the third day with the support seen in mostly Banking heavyweights.
Meanwhile, on Wall Street, S&P500 and Nasdaq headed higher, but the Dow slipped amid a mixed bag of earnings.
Also, traders will be awaiting results from the “Magnificent 7” to determine the direction of the US stock markets.
Other key data that investors may monitor will include the (i) US GDP, (ii) core PCE Index and (iii) US PMI.
Currently, the dollar index and the US 10-year Treasury yield are slightly positive.
On the commodity markets, Brent oil traded within a narrow range despite the ongoing tension in the Middle East and we expect a positive bias view as extreme weather conditions in the US may limit the oil supplies.
Sectors focus: With the mixed bag of earnings from Wall Street, profit taking activities may emerge after a 3-day rally on the local exchange.
However, we expect the trading focus to remain within the ongoing catalysts like (i) KL-SG HSR, (ii) easing requirements of MM2h as well as the focus in the Johor-region investments.
Also, the rising tension in the Red Sea could lift the shipping rates and contribute to potential trading opportunities within the Transportation & Logistics sector.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended higher for the 3rd consecutive session.
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 finished higher on Tuesday as sentiment lifted by potential stimulus plan in China. The local benchmark FBMKLCI (KLCI) advanced 4.92pts or 0.33% to end the day at 1,496.11.
Sectors-wise, transportation (+0.67%), financial services (+0.48%) and energy (+0.45%) were the top gainers. On the flip note, healthcare (-0.70%), utilities (-0.63%) and construction (-0.57%) were the top laggards.
Trading volume climbed to 5.16bn (up from 4.80bn on Monday) while trading value increased to RM3.33bn (up from RM3.12bn previously).
Market breadth stayed positive for the third consecutive session with 511 gainers against 470 decliners. The benchmark formed its third white candle yesterday, extending its rebound from Friday’s swing low.
However, the advance/decline ratio has weakened, possibly indicating that the upward momentum may be waning a tad. The 1,500-1,510 band remains as 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.
