Ahead of Thursday’s holiday for Nuzul Al-Quran, Bursa Malaysia had moved lower in two of three trading days since the end of the two-day winning streak in which it had collected almost 7 points or 0.5 percent.
The Kuala Lumpur Composite Index now sits just above the 1,530-point plateau and it’s expected to tick higher again on Friday.
At 9.16am, the FBMKLCI rose +3.39 points to open at 1,532.11.
RHB Retail Research in a note today (Mar 29) said the FKLI demonstrated further corrections towards the ascending 50-day SMA line on Wednesday, settling 11 pts lower at 1,530 pts and breaching the 1,533-pt previous support.
This indicates a consolidation that will persist towards the 1,520-pt support.
The index opened lower at 1,540 pts and then fell towards an intraday low of 1,527 pts before the close.
The latest bearish candlestick has nullified earlier anticipations of a positive rebound, likely leading to an extension of corrections towards the 1,520-pt immediate support.
The RSI has also shown weaker momentum, pointing at 49%, ie in negative territory.
Nevertheless, the FKLI is still trading above the ascending 50-day SMA line, which indicates the technical structure remains bullish.
Unless the immediate support is breached, they maintain a positive trading bias.
They recommend traders keep to the long positions initiated at 1,455 pts or the close of 3 Nov 2023.
To mitigate the downside risks, the trailing-stop threshold is set at 1,520 pts.
The first support is revised to the aforementioned 1,520 pts and followed by the 1,500-pt mark.
Meanwhile, the first resistance is pegged at 1,550 pts and followed by 1,563 pts, ie the high of 28 Feb.
Malacca Securities (MSSB) said the FBMKLCI (-0.51%) ended lower, in line with the mixed performance across the regional stock markets, as the index was dragged by Banking and Telco heavyweights.
On the broader market, the Energy sector (+0.51%) gained, while the Plantation sector (-0.63%) declined.
The Day Ahead
The FBMKLCI traded lower as the market was slightly cautious and profit taking activities emerged prior to the public holiday.
Meanwhile, they believe the US stock markets will be staying cautious ahead of Friday’s US personal consumption expenditures (PCE) data, which is closely watched in order to determine the Fed’s interest rate direction going forward.
Tracking the mixed sentiment in the US, MSSB believe the local exchange will trade in a rangebound mode today.
On the commodity markets, Brent oil surged strongly amid the ongoing OPEC+ production cuts, geopolitical tensions in the Middle East and attacks on Russia’s energy infrastructure, coupled with a falling US rig count.
Besides, the gold price has surged above the USD2230 zone.
Sectors focus: With the stronger commodities prices such as Brent oil and Gold prices, they believe the market could focus on the O&G and gold-related sectors.
Besides, the Construction and Property sectors will be taking the lead in the near term with the revival of infrastructure projects, higher investments in data centres and recovery prospects in the property segment.
Other sectors that may have short term trading ideas include Finance, Technology and Packaging.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended lower after consolidating around the 1,535 level.
The technical readings on the key index were negative, with the MACD Histogram extending a negative bar, and the RSI is hovering below 50.
The resistance is envisaged around 1,545-1,550 and the support is set at 1,510-1,515.
CGS International said Asian stock markets finished mixed on Thursday as some profit takings activities took place ahead of Good Friday holiday.
The local benchmark FBMKLCI (KLCI) dipped 7.82pts or 0.51% to end the day at 1,530.60.
The broader market was dragged by plantation (-0.63%), healthcare (-0.62%) and telecommunications (- 0.59%).
The top gainers were energy (+0.51%), construction (+0.27%) and property (+0.13%).
Trading volume dropped to 3.75bn (down from 3.83bn on Tuesday) but trading value increased to RM3.10bn (up from RM3.04bn previously).
Market breadth turned negative as 422 gainers weighed down by 645 decliners.
The benchmark formed a black candle on Wednesday and tested the support trend line from the 1,518 low.
Deeper consolidation continues but they believe that the current sideways trend is part of the benchmark’s base-building phase, forming a nice base above 50-day EMA.
The consolidation is likely to continue for a while longer with support seen at 1,525-1,531 followed by the critical support at 1,508-1,521.
On the upside, 1,545-1,550 is the immediate resistance before KLCI attempts to tackle the 20-month high at 1,559 and beyond.
The longer-term resistance is placed at 1,570-1,583.
Their portfolio stays in risk-on mode this week.
