Bursa Malaysia has moved higher in five straight sessions, collecting more than 25 points or 1.5 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,505-point plateau although investors may lock in gains on Monday.
At 9.15am, the FBMKLCI rose +1.83 points to open at 1,508.11.
RHB Retail Research in a note today (Jan 29) said the FKLI failed to sustain its uptrend last Friday and closed flat at 1,504.50 pts.
It opened at 1,506.50 pts, then rose to print the day’s high of 1,510 pts.
However, a pullback in the afternoon led to it closing flat.
Despite printing a bearish candlestick, it still charted a “higher low” and closed above 1,500 pts.
Furthermore, both 50-day and 200-day SMA lines continue to trend upwards, thereby cementing the bullish structure.
In the coming sessions, the index will consolidate sideways above the 1,500-pt level.
In the event profit-taking intensifies, the index would retrace to the lower support at 1,480 pts.
As long as the FKLI stays above 1,450 pts, the bullish setup should be intact.
For now, they will maintain a bullish trading bias.
Traders are advised to maintain the long positions initiated at 1,455 pts or the close of 3 Nov 2023.
To manage the downside risks, the stop-loss is fixed at 1,450 pts.
The nearest support is marked at 1,500 pts, followed by 1,480 pts.
On the other hand, the nearest resistance is pegged at
1,530 pts, followed by 1,550 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.14%) closed marginally higher, bucking the mostly weaker performance of the regional markets, due to buying pressure in selected Banking and Utilities heavyweights.
On the broader market, the Healthcare sector (+2.17%) was the leading sector, followed by the Construction sector (+1.12%).
The Day Ahead
The FBMKLCI charged higher for the fifth session, hovering above the 1,500 psychological level; still supported by the Utilities heavyweights. Meanwhile, the USstock markets ended the week on a mixed note as the S&P500 snapped the 5-day winning streak after Intel’s softer revenue forecast.
This week, the market should be watching closely on several events such as (i) China manufacturing PMI, (ii) FOMC meeting, (iii) jobs data in the US.
Overall, we still expect the buying support to sustain within the Malaysia stock markets. On the commodity markets, Brent oil continues
to climb higher, currently hovering above USD83/bbl mark amid potential China stimulus packages, coupled with the ongoing tension in the Middle East region.
Sectors focus: With the jump in the crude oil prices following the rising tension in the East region, we expect the O&G sector to perform well going forward. Also, shipping rates may spike and the Transportation & Logistics sector is likely to see an upside move. Meanwhile, the continuation of buying momentum within the YTL- related companies last week may continue as it should be supported by the KL-SG HSR and data centre theme for now. Besides, we do expect the Construction, Building Material, Property sectors to gain in tandem from these catalysts.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI ended higher for the 5th consecutive session. The technical readings on the key index were positive, with the MACD Histogram extending the first positive bar, while the RSI maintains above the 50 level.
The resistance is envisaged around 1,510-1,520 and the support is set at 1,480-1,470.
Upward Bias
Kenanga Investment Bank Berhad in its Weekly Technical Watch note today (Jan 29) said last week, the FBMKLCI continued its upward trend, breaking above the 1,500 level to close at 1,506.28, marking a 1.34% WoW increase.
This strong performance was primarily fuelled by ongoing foreign buying interest and the continued record-breaking trends in U.S. markets.
Additionally, the local market sentiment also improved, particularly as certain small-cap stocks that previously hit limit down began showing signs of recovery.
The upcoming shortened trading week will likely be influenced by key developments in the U.S. The Federal Reserve’s meeting on Tuesday and Wednesday is a central focus, with market participants not anticipating a change in monetary policy but eager for indications on when rate cuts may begin.
Additionally, the week is packed with major tech companies like Apple, Microsoft, Meta, Alphabet, Amazon, AMD, and NVO reporting their 4Q earnings.
Investors will be closely monitoring how these significant earnings and economic announcements impact the market.
Besides, the market could also receive a positive boost from the appointment of Malaysia’s new Agong on 31 January.
Technically, the FBMKLCI ended on a positive note after recording a double ‘Doji’ candlestick pattern in its weekly chart two weeks ago, which suggested potential continuation of its upward trend.
Interestingly, the index’s closing position on Friday was notably just a point below the critical 200-week SMA resistance level of 1,507, and it was also near the downward trend line established since April 2018.
This positioning strongly suggests that the index may test these critical resistance levels and potentially form new patterns in the upcoming week.
Key resistance levels for the index are at 1,507 and 1,527, with crucial support at 1,500 followed by 1,477.
CGSCIMB said Asian stock markets finished the week on a mixed note while regional tech shares declined. The local benchmark FBMKLCI (KLCI) rose 2.18pts or 0.14% to end the day at 1,506.28.
Week-on-week, the index advanced 19.91pts or 1.34%. The best performing sectors for the day were healthcare (+2.17%), construction (+1.12%) and energy (+1.02%).
The top laggards were telecommunications (-0.68%), industrial products (-0.52%) and technology (- 0.39%). Trading volume climbed to 4.92bn (up from 4.34bn on Wednesday) while trading value improved to RM3.42bn (up from RM2.88bn previously).
Market breadth stayed positive for the fifth consecutive session as 580 beat 477 decliners. The benchmark continued its rally and closed at the 18-month high (since June 2022) with its fifth white candle.
However, they see that the index is likely to find the 1,500-1,510 resistance band a tough nut to crack. Expect more fluctuations between the said band 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. Their portfolio stays in risk-on mode this week.
