Bursa Malaysia has moved higher in two straight sessions, collecting more than 8 points or 0.5 percent along the way.
The Kuala Lumpur Composite Index now sits just beneath the 1,540-point plateau although it’s likely to open under pressure on Monday.
At 9.15am, the FBMKLCI rose +2.15 points to open at 1,542.01.
The FKLI’s rebound was extended last Friday, and it closed 4 pts higher, at 1,518 pts.
RHB Retail Research in a note today (Mar 11) said the index opened at 1,514 pts, then rose to the day’s high of 1,524 pts before closing, thereby charting a bullish candlestick.
However, it has yet to cross above the 1,520-pt resistance.
This, coupled with the RSI still being below the 50% threshold, shows that the index should continue trending sideways for a consolidation.
At this stage, the FKLI remains above the 50-day SMA line and is keeping the bullish structure intact.
In the event selling pressure increases again, the 1,500-pt level should act as an immediate support point.
As long as the index stays above the 1,500-pt support, the house will maintain a bullish trading bias.
Traders should remain in 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 1,500 pts.
The nearest support is at 1,500 pts, followed by 1,480 pts.
Towards the upside, the nearest resistance remains at 1,520 pts – 5 Mar’s high – followed by a higher resistance level of 1,543 pts ie the high of 1 Mar.
Malacca Securities (MSSB) said the FBM KLCI (+0.26%) ended higher, in line with the positive performance in the regional stock markets, led by selected Banking and Utilities heavyweights.
On the broader market, the Telco & Media sector (+1.03%) was the leading sector, while the Utilities sector (-1.10%) declined.
The Day Ahead
The FBMKLCI extended its rebound with the help of Banking, Telco and Plantation heavyweights.
Meanwhile, the US stock markets could have hit the resistance after price action reversed throughout the session with selling pressure noticed within Nvidia after the release of mixed jobs data for February.
For this week, the house may anticipate a softer tone of upside move on the FBMKLCI and FBM Small Cap following the weaker sentiment from the US.
On the commodity markets, Brent oil fell below USD82, while the Gold price surged towards an all-time-high zone.
For the FCPO, it is trading near the psychological level of RM4,100.
Sectors focus: Although MSSB expect the upside move to be limited in the near term, they believe buying interest may persist within the Banking and Plantation sector; the latter is likely to trade firmer with its underlying FCPO trading near RM4,100.
Meanwhile, MSSB believe the Gold-related stocks should perform well given the all-time-high in Gold prices.
Besides, they favour the Technology sector on the local front, especially on UNISEM, MPI and FPI after their good set of results released during Feb reporting season.
Bloomberg FBMKLCI Technical Outlook
After forming a hammer candle on the FBMKLCI, the key index extended the rebound higher.
The technical readings on the key index, however were negative, with the MACD Histogram extending another negative bar, while the RSI approaching 50.
The resistance is envisaged around 1,550-1,555 and the support is set at 1,515-1,520.
CGS International said Asian stock markets finished the week in the green lifted by technology shares across the region. The local benchmark FBMKLCI (KLCI) rose 4.03pts or 0.26% to end the day at 1,539.86.
Week-on-week, the index inched up 1.84pts or 0.12%. On Friday, telecommunications (+1.03%), energy (+0.71%) and plantation (+0.67%) topped as the best performing sectors whereas utilities (- 1.10%), industrial products (-0.51%) and construction (-0.42%) were the top laggards.
Trading volume continued to fall to 3.03bn (down from 3.55bn on Thursday) but trading value increased to RM2.73bn (up from RM2.60bn previously).
Market breadth was slightly negative with 486 gainers losing out marginally to 496 decliners. Last Friday’s buying in the banking heavyweights pushed the benchmark to close above the 20-day EMA again.
CGS reckons that the market is likely to stay choppy ahead and cannot rule out that further consolidation could still take place in the coming days.
For now, any upside is likely to be capped at the 1,550 psychological level as the immediate barrier.
Conversely, if there are residual selling, then look for the index to fall and retest the 1,508-1,521 levels again. CGS’s portfolio stays in risk-on mode this week.
