Bursa Malaysia on Wednesday ended the two-day winning streak in which it had picked up more than 20 points or 1.3 percent.
Ther Kuala Lumpur Composite Index now sits just above the 1,550-point plateau and it’s likely to remain in that neighborhood again on Thursday.
At 9.15am, the FBMKLCI dipped -1.69 points to open at 1,550.71.
RHB Retail Research in a note today (Feb 22) said the FKLI’s upward momentum movement took a pause yesterday as it closed 3.50 pts lower at 1,554.50 pts.
Opening at 1,558 pts, the index’s movement fell towards the 1,550-pt low before partially recovering its intraday losses to close at 1,554.50 pts.
Yesterday’s weak momentum was in line with our earlier anticipation of profittaking risks, considering that the RSI is in overbought territory.
Based on the latest price weakness, they believe any upward movements in the coming sessions should be limited to around 1,570 pts.
Despite short-term profit-taking risks, the medium-term uptrend structure above the ascending 50-day SMA line remains intact.
Based on the technical setup, they make no change to our bullish 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 threshold is fixed at 1,450 pts.
The first support is marked at 1,515 pts and followed by the 1,500-pt mark. On the upside, the first resistance is now eyed at 1,570 pts and followed by the 1,600-pt level.
Malacca Securities (MSSB) said the FBMKLCI (-0.21%) ended lower, in line with the mixed performance in the regional stock markets, dragged by Telco heavyweights. On the broader market, the Technology sector (+0.36%) was the leading sector, while the Energy sector (- 1.29%) declined.
The Day Ahead
The FBMKLCI slid marginally after a 3-day winning streak as profit taking emerged, while the US stock markets closed mixed prior to the release of Nvidia’s results, while pricing in the Fed’s minutes, where most of the Fed’s officials worried on moving too quickly to cut rates and inflation might spike again with the ongoing geopolitical tension.
While the elevated interest rates environment may persist, Nvidia’s post- market results managed to beat expectations and will be able to support the overall sentiment at least for the near term.
On the local front, they reckon the market sentiment will stay positive amid the better-than-expected corporate earnings season.
On the commodity market, the Brent oil price headed higher on the back of ongoing tension in the Middle East region.
Sectors focus: MSSB believes the market may be focusing on Property, Construction and Building Material as well as O&G sectors following corporate earnings releases from Sunway-related, Avaland, and Perdana.
Meanwhile, they still expect the Technology to improve further from this point in tandem with the spike in Nvidia after hours following the release of corporate earnings.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI pulled back after the previous day rally.
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 1,560-1,570 and the support is set at 1,520-1,530.
CGSCIMB said Asian stock markets closed mixed yesterday as rallies in China offset chiprelated stock losses in Japan, South Korea and Taiwan.
The local benchmark FBMKLCI (KLCI) gave up 3.19pts or 0.21% to end the day at 1,552.40. It was a day of consolidation after Tuesday’s hefty move higher.
Most sectors closed in the red with energy (-1.29%), property (-1.28%) and healthcare (-1.03%) leading the laggards. Only technology (+0.36%) and financial services (+0.13%) managed to stay in the black yesterday.
Trading volume eased marginally to 3.65bn (down from 3.70bn on Tuesday) while trading value fell to RM2.71bn (down from RM2.94bn previously).
Market breadth swung back in favour of decliners as 386 gainers lost out to 652 losers. It was an inside day yesterday, indicating a temporary indecision among players.
CGSCIMB believe the benchmark is likely to see a tad more consolidation as the market players digest the strong gains seen on Tuesday as well as gains accumulated from last week.
The 1,550 psychological level is the immediate support followed by 1,534-1,538 thereafter.
Once this short consolidation ends, the index is likely to climb closer to the next level of resistance at 1,570-1,583.
Their portfolio stays in risk-on mode this week.
