Bursa Malaysia on Tuesday ended the six-day winning streak in which it had collected more than 35 points or 2.1 percent.
The Kuala Lumpur Composite Index now sits just above the 1,510-point plateau and it’s likely to remain in that neighborhood again on Wednesday.
At 9.16 am the FBMKLCI dipped -0.38 points to open at 1,512.60.
RHB Retail Research in a note today (Jan 31) said the FKLI experienced a temporary halt to its bullish momentum during yesterday’s session – marked by the intraday profit-taking that resulted in a 2-pt dip to close at 1,514.50 pts.
Commencing at 1,517.50 pts, the index surged to the day’s peak at 1,524.50 pts before a reversal led to a retreat.
It erased all intraday profits, reaching a low of 1,514 pts just before the market closure.
Latest black body candlestick with a long upper shadow suggests a potential pullback, likely supported at 1,500 pts.
The overall trend remains positive since the index is trading above both 50-day and 200-day SMA lines.
The RSI is rounding downwards, signalling the momentum is slowing down. Despite short-term profit-taking, our trading bias remains bullish.
Traders should keep the long positions initiated at 1,455 pts (the close of 3 Nov 2023). To mitigate the downside risks, the stop-loss threshold is fixed at 1,450 pts.
The first 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 (-0.18%) closed lower, in line with the mostly negative performance of the regional markets, due to selling pressure in selected Healthcare, Industrial Products and Telco heavyweights.
On the broader market, the Utilities sector (+0.88%) was the leading sector, while the Plantation sector (-0.75%) fell.
The Day Ahead
The FBMKLCI snapped a 6-day winning streak as profit taking activities emerged despite YTL-related heavyweights gaining further momentum. Meanwhile, the US stock markets ended on a mixed note with the Dow charged towards fresh all-time-highs, while S&P500 and Nasdaq fell as the market stayed cautious on the Technology shares prior to the conclusion of the FOMC meeting.
Hence, they expect continuation of profit taking activities on the local front with the Evergrande incident.
On the commodity markets, Brent oil traded firmer above USD82/bbl after the solid US jobs data, suggesting that the US economic activities continue to grow, coupled with the ongoing Middle East tension.
Sectors focus: We expect the overall market may consolidate with the FBM Small Cap turning lower at this juncture. Nevertheless, we still like the Construction, Property, Building Material sectors for the trading theme within the (i) KL-SG HSR, (ii) easing requirements of the MM2H and (iii) Johor-related investments.
Meanwhile, they believe the O&G sector may sustain its momentum as Brent oil price hovers above USD82/bbl. Besides, with the LSS5 announcement recently, there will be a spike of trading interest within solar EPCC players.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended lower, snapping a 6-day winning streak. The technical readings on the key index were positive, with the MACD Histogram extending the 3rd 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 finished lower on Tuesday with Hong Kong’s HSI (-2.32%) leading the losses. The local benchmark FBMKLCI (KLCI) pared gains, sliding 2.64pts or 0.17% to end the day at 1,512.75.
Most sectors were in the red barring utilities (+0.88%), construction (+0.78%), financial services (+0.05%) and REIT (+0.03%). The worst performing sectors included plantation (-0.75%),energy (-0.50%) and industrial products (-0.49%).
Trading volume decreased to 3.78bn (down from 4.32bn on Monday) while trading value eased to RM2.64bn (down from RM2.98bn previously).
Market breadth stayed negative as 383 gainers lost out to 622 decliners. The benchmark formed a black candle yesterday after recording its sixth consecutive positive session.
Minor profit-taking activities led to a pullback from its 18-month high (since June 2022). Further consolidation is likely as the market
digest the recent gains.
The 1,500 psychological level is the immediate support now followed by 1,470-1,477 next. On the upside, the bulls may try another attempt to take prices up towards the 1,521-1,527 levels next after the bulls refuel their tanks.
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. Their portfolio stays in risk-on mode this week.
