Bursa Malaysia has moved higher in six straight sessions, collecting more than 35 points or 2.1 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,515-point plateau and it may extend its gains again on Tuesday.
At 9.16am, the FBMKLCI rose +1.72 points to open at 1,517.75.
RHB Retail Research in a note today (Jan 30) said the FKLI surged towards the immediate resistance at 1,530 pts yesterday, before settling 12 pts higher at 1,516.50 pts – strengthening its uptrend structure above 1,500 pts.
It opened at 1,505.50 pts, and then rose to the day’s high of 1,522 pts.
It then retreated moderately before the close. The formation of a fresh “higher high” bullish structure yesterday firmed up the bullish setup above the ascending 50-day and 200-day SMA lines.
In the coming sessions, the index will likely move higher to test the 1,530-pt immediate resistance before consolidating near this level.
As such, they maintain our bullish trading bias.
Traders should maintain the long positions initiated at 1,455 pts (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 1,500 pts, followed by 1,480 pts, while the nearest resistance is pegged at 1,530 pts, followed by 1,550 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.60%) closed higher, in line with the mostly positive performance of the regional markets, due to buying pressure in selected Banking, Plantation and Telco heavyweights.
On the broader market, the Plantation sector (+1.35%) was the leading sector, while the Healthcare sector (-0.75%) declined.
The Day Ahead
The FBMKLCI closed above the 1,500 psychological level with high conviction price action, continuing its winning streak for the sixth session led by the banking heavyweights.
Also, the US stock markets marched stronger for the session ahead of the FOMC meeting as well as earnings releases from the Technology giants this week.
However, as the Hong Kong court orders liquidation of China’s Evergrande Group, we believe it may cause the overall sentiment to turn negative at least for the near term, translating to potential profit taking mode on the local front.
Meanwhile, on the commodity markets, Brent oil maintained above the USD80/bbl amid the ongoing tension in the Middle East region, but the upside was capped due to the liquidation order of Evergrande.
Sectors focus: Profit taking activities may emerge within the recent strong rally sectors such as the Construction and Property sectors following Evergrande episode.
However, with YTL winning another contract in Singapore, that should provide support towards the Utilities sector. We expect the buying interest to build up within the Plantation sector with firmer CPO prices recently. Also, the O&G sector is likely to be on the radar as the Brent oil price is above USD80/bbl.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended higher for the 6th consecutive session. The technical readings on the key index were positive, with the MACD Histogram extending another positive bar, while the RSI maintains above the 50 level.
The resistance is envisaged around 1,520-1,530 and the support is set at 1,490-1,480.
CGSCIMB said Most Asian stock markets started the week in positive territory, led by India’s BSE Sensex (+1.76%). The local benchmark FBMKLCI (KLCI) surged 9.11pts or 0.60% to end the day at 1,515.39.
Sectors wise, plantation (+1.35%), financial services (+0.69%) and energy (+0.57%) were the top gainers whereas healthcare (-0.75%), construction (-0.56%) and utilities (-0.51%) were among the laggards.
Trading volume fell to 4.32bn (down from 4.92bn on Friday) while trading value dropped to RM2.98bn (down from RM3.42bn previously). Market breadth turned negative as 499 gainers marginally weighed down by 513 decliners.
The benchmark gapped up and closed at a new 18-month high (since June 2022) yesterday with its sixth white candle. The bulls is likely to take prices up towards the 1,521-1,527 levels next should the buying momentum continues.
A close above its 200-week EMA (currently at 1,510) at end of the week likely suggests a change in its longer-term trend towards the upside.
However, given the negative Advance/Decline ratio (A/D) yesterday, the index may start to pullback a little. The 1,500 psychological level is the immediate support now followed by 1,470-1,477 next.
Their portfolio stays in risk-on mode this week.
