Bursa Malaysia ticked higher again on Tuesday, one day after ending the two-day winning streak in which it had picked up just 4 points or 0.3 percent.
The Kuala Lumpur Composite Index now sits just above the 1,510-point plateau and it may add to its winnings on Wednesday.
At 9.16am, the FBMKLCI rose +0.26 points to open at 1,512.51.
RHB Retail Research in a note today (Feb 2) said the FKLI’s movement continued its correction trajectory yesterday, experiencing a 1-pt pullback to close at 1,514 pts.
Its movement began trading slightly lower at 1,514.50 pts and fluctuated between 1,510.50 pts and 1,517.50 pts, ending just below the opening level.
As anticipated in our previous note, this correction should persist towards the strong support at 1,500 pts in upcoming sessions before rebounding towards the immediate resistance at 1,530 pts.
The RSI momentum indicator, though mildly lower at 65% from 66%, remains in positive territory – indicating the weak price action is likely temporary with the overall bullish momentum intact.
With the uptrend maintained above the ascending 50- and 200-day SMA lines, we continue to maintain a bullish trading stance.
Traders should hold on to the long positions initiated at 1,455 pts, ie the close of 3 Nov 2023.
To manage the trading risks, the stop-loss threshold is set at 1,450 pts.
The immediate support remains unchanged at 1,500 pts, followed by the 1,480-pt mark.
On the other hand, the first resistance is still pegged at 1,530 pts and followed by the 1,550-pt level.
Malacca Securities (MSSB) said the FBMKLCI (+0.11%) closed higher, despite the mixed performance of
the regional markets, led by buying interest seen within selective Industrial and Consumer Products, and Utilities heavyweights.
On the broader market, the Energy sector (+1.03%) was the leading sector, while the Healthcare sector (-0.28%) fell.
The Day Ahead
The FBMKLCI continued to trade within a rangebound manner ahead of the Chinese New Year long weekend break.
Meanwhile, Wall Street managed to gain momentum
as the US Treasury yields slipped with investors pushing back the expectation of the Fed’s first rate cut by 2H24.
On the Chinese stocks, we noticed a significant rebound
after Beijing ramped up efforts to put a stall in the falling China and Hong Kong stock markets.
With the rebound in global as well as China and Hong Kong stock markets, we believe the buying support may emerge this week on our local stock exchange.
On the commodity markets, Brent oil inched higher as EIA expects the oil inventories to fall in the current quarter on reduced productions from OPEC+ and the US.
Sectors focus: Most of the sectors should be gaining momentum with the focus hovering within the key themes such as (i) the revival of KL-SG HSR mega
infrastructure projects and (ii) the ongoing Johor-region developments.
Also, they lexpect the LSS5 announcements may bode well for solar-related EPCC players on the exchange.
We like Consumer and Telco for their defensive characteristics; the latter may benefit from increased data centres investments in Malaysia.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended higher but still hovering within the consolidation phase.
The technical readings on the key index were mixed, with the MACD Histogram turned negative, 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.
