The FBMKLCI (+0.33%) ended higher, despite the mixed performance in the regional stock markets, boosted by selected Consumer Products and Banking heavyweights.
At 9.15am, the FBMKLCI rose +0.11 points to open at 1,538.72.
Malacca Securities (MSSB) in a note today (Feb 20) said on the broader market, the Property sector (+0.72%) was the leading sector, while the Utilities sector (-0.89%) declined.
RHB Retail Research said the FKLI is poised to extend the upside movement after charting a fresh 52-week high yesterday, closing 8.50 pts higher at 1,543.50 pts and forming a fresh “higher high” bullish pattern.
Starting the session higher at 1,538.50 pts, the index established the day’s low of 1,535 pts before rising to the day’s high of 1,544.50 pts prior to closing.
The latest session confirms the bullish technical setup with a “higher high” – indicating a potential move towards the 1,550 pts immediate resistance level.
However, the RSI has entered overbought territory at 71%, increasing the risk of profit-taking and a possible correction after testing the 1,550-pt resistance.
Based on the price action and technical indicators, the house maintains its bullish trading bias.
Traders should retain the long positions initiated at 1,455 pts, or the close of 3 Nov 2023. To minimise the downside risks, the stop-loss is fixed at 1,450 pts.
The first support is set at 1,515 pts, followed by 1,500 pts. On the upside, the first resistance is eyed at 1,550 pts, followed by 1,570 pts.
The Day Ahead
The FBMKLCI added strength with the buying support observed within Genting and Banking heavyweights.
Meanwhile, the US stock markets were closed for the President’s Day public holiday.
This week, the market will be monitoring the (i) FOMC meeting minutes, (ii) unemployment claims and (iii) the US PMI data on Thursday.
On the local front, MSSB expects continuation of buying interest on the broader market ahead of the earnings season.
On the commodity market, the Brent oil price traded firmer above the USD83/bbl mark as concerns over the tensions in the Middle East
persisted, while the FCPO prices stayed above RM3,800 for the third session.
Sectors focus: With corporate earnings season around the corner, MSSB believes traders will be looking for opportunities within the fundamentally solid companies.
They noticed Consumer stocks may perform well with the normalising costs throughoutlast year and increasing demand during the final quarter of 2023.
Meanwhile, they believe the Plantation sector could trend firmly higher with the momentum building up recently, in tandem with the FCPO prices.
Besides, the Technology sector may turn attractive with the ongoing bidding for NIISe 2.0 project.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended higher, on an upward trend. 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 1,540- 1,550 and the support is set at 1,500-1,510.
