Bursa Malaysia has moved lower in two of three trading days since the end of the two-day slide in which it had slipped more than 10 points or 0.6 percent.
The Kuala Lumpur Composite Index now sits just beneath the 1,560-point plateau and it’s likely to be rangebound again on Wednesday.
At 9.15am, the FBMKLCI dipped -2.50 points to open at 1,556.30.
RHB Retail Research in a note today (Feb 28) said the FKLI resumed its uptrend yesterday, climbing 12.50 pts to close at 1,561.50 pts.
The index futures opened at 1,548 pts and progressed higher throughout the session, hitting a high of 1,563 pts before the close.
The latest bullish candlestick solidifies its bullish structure above the ascending 50-day SMA line, signalling a resumption of bullish momentum.
Nevertheless, the house remains cautious of short-term profit-taking activities as the RSI has entered overbought territory – printing at the 71% level.
For the medium-term outlook, they remain positive as the index continue to trade above the ascending 50-day and 200-day SMA lines.
Premised on the renewed momentum, the house maintain their bullish bias.
Traders should keep the long positions initiated at 1,455 pts or the close of 3 Nov 2023. To manage the trading risks, the stop-loss is fixed at 1,500 pts.
The nearest supports are marked at 1,515 pts and 1,500 pts. Conversely, the immediate resistance is pegged at 1,600 pts, followed by the 1,650-pt level.
Malacca Securities (MSSB) said the FBMKLCI (+0.72%) ended higher, in line with the positive performance in the regional stock markets, boosted by Utilities and Telco heavyweights.
On the broader market, the Utilities sector (+1.76%) was the leading sector, while the Transportation & Logistics sector (-0.76%) declined.
The Day Ahead
The FBMKLCI added strength after a 4-day consolidation with the help of Utilities heavyweights. Likely, the overall sentiment will remain positive, digesting the improvements in latest quarterly results.
On Wall Street, sentiment was mixed as US Consumer Confidence retreated in Feb. Meanwhile, the traders will be focusing on the upcoming Core PCE, unemployment claims and the US Manufacturing PMI as these factors may dictate the Fed’s tone going forward.
On the commodity market, the Brent oil price slid after Joe Biden’s statement on a potential ceasefire agreement between Israel and Hamas is in the works, but still ranging within USD81- 83/bbl, while the Gold prices have recovered gradually above the USD2030 zone.
Sectors focus: A general trend of gradual recovery was noticed within the metalrelated stocks, such as PRESTAR, PA and SCGBHD, thus this may translate to higher trading activities within the Building Material segment.
Meanwhile, the Packaging sector has seen improvements in BPPLAS and PPHB.
Besides, selected Technology stocks like DUFU and UNISEM have seen recovery and MSSB reckon traders to pay attention to the Technology sector.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI ended higher breaking out from the 4-bar consolidation pattern. However, the technical readings on the key index were mixed, with the MACD Histogram forming a rounding top formation, while the RSI hovering above 70.
The resistance is envisaged around 1,565-1,575 and the support is set at 1,540-1,550.
CGSCIMB said Asian equities rose, reversing an earlier fall, driven by a recovery in Chinese and Hong Kong shares.
Gains in Japan also helped sentiment. The local benchmark FBMKLCI (KLCI) rallied 11.20pts or 0.72% to end the day at 1,558.80.
Sector-wise, the majority turned in a positive day with utilities (+1.76%), construction (+1.15%) and consumer products (+0.53%) leading the gainers table.
Transportation (-0.76%), energy (-0.51%) and healthcare (- 0.44%) topped the laggards list.
Trading volume inched up slightly to 3.88bn (up from 3.74bn on Monday) but trading value eased a tad to RM3.09bn (down from RM3.12bn previously).
Market breadth remained negative for a third day in a row as 570 decliners beat 548 winners.
The benchmark formed a long white candle to record a new 20-month high yesterday after trading sideways for the past four trading days.
The bulls appear refreshed and ready to take on another battle.
The index is likely to climb closer towards 1,570-1,583 next.
The immediate support is now at 1,534-1,538 (which includes the rising trend line, currently at 1,538).
Closing below the rising trend line may signal that a deeper correction may be taking place.
Their portfolio stays in risk-on mode this week.
