Bursa Malayia on Tuesday ended the three-day winning streak in which it had collected more than 15 points or 1 percent.
The Kuala Lumpur Composite Index now sits just beneath the 1,545-point plateau although it’s likely to bounce higher again on Wednesday.
At 9.16am, the FBMKLCI dipped -0.13 points to open at 1,545.06.
RHB Retail Research in a note today (Mar 20) said the FKLI retraced 5.50 pts to close at 1,546.50 pts yesterday, indicating a potential correction ahead.
It opened at 1,552.50 pts and traded in a tight range between 1,556.50 pts and 1,542 pts before closing below the opening level.
The pullback is expected to be temporary, with support seen at the 1,533 pts immediate support.
Post consolidation, we expect the index to resume its uptrend towards the 1,563 pts immediate resistance – the 52-week high.
If this level is breached, the FKLI may trend higher towards the 1,600-pt resistance level.
At this juncture, the RSI indicator is hovering near 60% (positive territory), suggests the overall momentum remains bullish.
Supported by the ascending 50- and 200-day SMA lines, the house maintains 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 immediate support remains unchanged at 1,533 pts – 20 Mar’s low – followed by 1,520 pts.
Conversely, the immediate resistance still pegged at 1,563 pts –28 Feb’s high – followed by the higher resistance of 1,600 pts.
Malacca Securities (MSSB) said the FBMKLCI (-0.56%) ended lower, in line with the negative performance in the regional stock markets, dragged by selected Telco, Banking and Industrial Product heavyweights.
On the broader market, the Property sector (+1.03%) was the leading sector, while the Utilities sector (-0.58%) declined.
The Day Ahead
The FBMKLCI closed lower for the session with the profit taking activities seen within selected Banking heavyweights.
In the US, we noticed trading activities had slowed down ahead of the conclusion of the FOMC meeting as the market is looking forward to the Fed’s statement in order to understand the timing of the interest rate cut.
Similarly, they opine that the overall market conditions on the local front will turn softer with profit taking activities emerging after recent rebound on small caps.
On the commodity markets, Brent oil has traded positively for the fifth session, breaching above the USD87/bbl mark.
For the FCPO, it has pulled back, but trading above the RM4,200 level.
Sectors focus: Given the recent upward trend on Brent oil above the USD87 level, they believe the traders will be focusing on the O&G sector at least for the near term in view of higher capex from Petronas this year as well.
Besides, the house noticed consumer stocks were having an increase in trading activities following Apollo’s strong dividend payout, this may provide upside opportunities within the sector.
Also, they favour the Telco, Finance, Property, Solar as well as Packaging industries.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended lower.
The technical readings on the key index were mixed, with the MACD Histogram hovering flattish along 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 mixed on Tuesday amid BOJ interest rate hike.
The local benchmark FBMKLCI (KLCI) fell 8.68pts or 0.56% to end the day at 1,544.96.
The broader market was dragged by utilities (-0.58%), telecommunications (-0.48%) and financial services (-0.33%).
Top gainers were property (+1.03%), healthcare (+0.50%) and REIT (+0.27%).
Trading volume dropped to 4.06bn (down from 4.24bn on Monday) whereas trading value improved to RM3.09bn (up from RM2.79bn previously).
Market breadth stayed positive seven days in a row with 510 gainers marginally outperforming 502 decliners.
The benchmark pulled back with a black candle yesterday, extending its pennant consolidation.
The index may continue to trade in a sideways manner until the breakout happens.
Pennant consolidation usually translates to a bullish continuation on a breakout, which may send the bulls up to retest the 20-month high at 1,559 and beyond.
The longer-term resistance is placed at 1,570-1,583.
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.
