Bursa Malaysia has ticked higher in back-to-back sessions, gathering almost 4 points or 0.3 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,515-point plateau and it’s likely to see additional support again on Monday.
At 9.16am. the FBMKLCI rose +0.31 points to open at 1,515.91.
RHB Retail Research in a note today (Feb 5) said the FKLI continued charging higher during Friday’s session, adding 3.50 pts to close up at 1,518.50 pts.
The index started off trading at 1,517.50 pts.
At one point, it rose to the day’s high at 1,528.50 pts.
Profit taking activities ensued, causing a retracement in the afternoon, where the index pared its intraday gains to close at 1,518.50 pts.
Although the index charted a candlestick with a long upper shadow, the bullish setup remains intact.
The index is still trading above the 50-day and 200-day SMA lines, with both lines trending higher.
Meanwhile, a strong support has formed at the 1,500-pt level.
In a bullish setup, the support level will be strong. In the event profit taking activities extend, expect a rebound to happen near the 1,500-pt support.
For now, they hold on to our positive trading bias.
Traders are advised to hold on to the long positions initiated at 1,455 pts (the close of 3 Nov 2023).
To minimise the trading risks, the stop-loss is set at 1,450 pts.
The immediate support remains unchanged at 1,500 pts, followed by 1,480 pts.
Towards the upside, the immediate resistance is eyed at 1,530 pts, followed by 1,550 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.24%) closed higher, in line with the mostly positive performance of the regional markets, with buying interest seen within selecting Banking and Utilities heavyweights.
On the broader market, the Consumer Products sector (+0.70%) was the leading sector, while the Energy sector (-1.58%) declined.
The Day Ahead
The FBMKLCI maintained its upward tone after a two-day consolidation and we expect buying support to continue this week. On Wall Street, the overall sentiment was boosted by stronger-than-expected earnings from META which announced its first quarterly dividend following robust ad sales in the holiday shopping period.
Also, we like Apple Inc for the release of Vision Pro headgear which may provide the next phase of growth for the technology space going forward.
This week, the market will monitor the (i) US ISM Services PMI and (ii) unemployment claims data on Thursday. On the commodity markets, Brent oil fell below USD80/bbl level amid stronger dollar after US added 353k jobs in January.
Sectors focus: With the bullish tone seen in the US stock markets, we expect buying interest to emerge within the Technology sector. Given the REIT and Transportation & Logistic sectors momentum was decent last week, there might be continued buying support this week; the former could be due to stable OPR at this juncture.
Meanwhile, other trading catalysts such as the (i) potential revival of KL-SG HSR as well as (ii) Johor-region investments could bode well for the Construction, Property, Utilities and Building Materials sectors.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended higher. However, the technical readings on the key index were mixed, with the MACD Histogram forming a rounding top formation, 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 stronger ahead of the US NFP later that night. However, stocks in Hong Kong and China continued lower on Friday.
The local benchmark FBMKLCI (KLCI) closed 3.60pts or 0.24% higher to end the week at 1,516.58. Week-on-week, the benchmark closed 10.30pts or 0.68% higher.
The broader market weakened again with the largest laggards being energy (-1.58%), utilities (-1.51%), FBMACE (-1.19%) and property (-
1.09%).
The gainers were consumer products (+0.70%), financial services (+0.37%) and REIT (+0.29%). Trading volume was marginally lower to 3.66bn (down from 3.67bn on Wednesday) whereas trading value increased to RM3.00bn (up from RM2.86bn previously).
Market breadth stayed firmly negative with 311 gainers losing out to 690 decliners. The benchmark pushed to a new 18-month high (on a close-basis) on Friday, closing above the 200-week EMA for the first time since April 2022.
The strong close also sent prices above the resistance trend line from the 2021 high, potentially signalling that the longer-term trend may be tilting towards the bulls.
1,521-1,527 is the immediate resistance and a close above this band may see prices climb towards 1,540-1,550 next. Failure to push on may warn that further consolidation is needed first before the next wave higher takes place.
The 1,500 psychological level is the immediate support now followed by 1,470-1,477 next. Our portfolio stays in risk-on mode this week.
