Bursa Malaysia bounced higher again on Thursday, one day after ending the four-day winning streak in which it had collected more than 20 points or 1.4 percent.
The Kuala Lumpur Composite Index now sits just beneath the 1,545-point plateau although it may hand back those gains on Friday.
At 9.15am, the FBMKLCI dipped -6.80 points to open at 1,536.95.
RHB Retail Research in a note today (Mar 15) said after the FKLI’s bullish momentum faded on Wednesday, it traded in a positive tone yesterday, adding 4 pts to close at 1,537 pts – indicating consolidation beneath the immediate resistance.
It opened lower at 1,532 pts, and oscillated positively between a 1,528.50 pts low and a 1,540 pts high before closing on a positive note.
Yesterday’s bullish momentum suggests that Wednesday’s pullback may be limited to yesterday’s low, and the index is likely to consolidate below the 1,543 pts resistance in the coming sessions – with an upside bias in the medium-term.
The RSI hovers near the 55% level – indicating bullish momentum is still intact.
As such, they maintain their bullish trading bias.
Traders should maintain the long positions initiated at 1,455 pts (the close of 3 Nov 2023).
To minimise the downside risks, the stop-loss threshold is fixed at 1,500 pts.
The nearest support is at 1,500 pts, followed by 1,480 pts.
Conversely, the nearest resistance is set at 1,543 pts – 1 Mar’s high – followed by the higher resistance at 1,563 pts or the high of 28 Feb.
Malacca Securities (MSSB) said the FBMKLCI (+0.37%) ended higher, despite with the mostly negative
performance in the regional stock markets, boosted by selected Industrial Products, Plantation and Telco heavyweights.
On the broader market, the Energy sector (+1.24%) was the leading sector, while the Utilities sector (-0.54%) declined.
The Day Ahead
The FBMKLCI closed higher in tandem with most of the Asian stock markets’ performances as led by Plantation and Telco heavyweights.
Meanwhile, Wall Street ended softer as the core PPI and PPI data spiked 0.3% and 0.6% MoM against forecasts of 0.2% and 0.3%, respectively, while core retail sales rose 0.3% MoM as compared to forecast of 0.5%.
Most of the data could point to slower growth in consumption activities and slightly more hawkish tone by the Fed, which may contribute to a delay in interest rate cut going forward.
On the commodity markets, Brent oil inched higher above the USD85/bbl level due to an improved US demand
outlook following a higher-than-expected decline in US crude inventories as well as ongoing geopolitical risk.
Sectors focus: Despite the slight decline in the US, we expect the positive sentiment on the local front to sustain with the traders focusing on commodities related stocks within the Plantation and O&G.
Besides, they like the Construction and Property sectors for the potential revival of KL-SG HSR, while investors may continue to position within the defensive Consumer sector.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher with a bullish engulfing bar above the EMA20 level.
The technical readings on the key index were mixed, with the MACD Histogram hovering near 0, while the RSI is above 50.
The resistance is envisaged around 1,555-1,560 and the support is set at 1,525-1,530.
CGS International said Asian stock markets finished higher on Thursday ahead of US producer prices release.
The local benchmark FBMKLCI (KLCI) climbed 5.62pts or 0.37% to end the day at 1,543.75.
Most sectors rallied led by energy (+1.24%), transportation (+0.86%) and construction (+0.72%).
The only laggards for the day were utilities (-0.54%), technology (-0.25%) and telecommunications (-0.24%).
Trading volume increased to 4.34bn (up from 4.18bn on Wednesday) while trading value grew slightly to RM2.76bn (up from RM2.73bn previously).
Market breadth stayed positive four days in a row with 513 gainers beat 478 decliners.
The benchmark rebounded and closed above the 20-day EMA again with a white bullish candle.
Further consolidation may be underway in the coming days, with the index potentially trading in a sideways manner.
The KLCI is likely to continue to form a base, supported by the rising 20-day and 50-day EMA.
The huge 1,543-1,554 gap (13th Mar gap) acts as the immediate resistance before the bulls retest the 20-month high at 1,559 next.
The longer-term resistance is placed at 1,570-1,583.
Conversely, the 1,525-1,531 level acts as the minor support, followed by the 1,508-1,521 band.
Their portfolio stays in risk-on mode this week.
