The FBMKLCI (+0.36%) ended higher, in line with the positive performance across the regional stock markets, as the index was led by Banking and Utilities heavyweights.
Malacca Securities (MSSB) said on the broader market, the Energy sector (+0.99%) gained, while the Plantation sector (-0.15%) declined.
At 9.16am, the FBMKLCI rose +1.43 points to open at 1,537.50.
RHB Retail Research in a note today said the FKLI staged a rebound last Friday, climbing 10.50 pts to close higher at 1,540.50 pts – recouping the bulk of the intra week losses.
The index initially began trading at 1,534 pts and after setting its foothold at the day’s low of 1,532 pts, it rose to the day’s high of 1,543.50 pts and closed at 1,540.50 pts.
The latest bullish candlestick suggests that the selling pressure is easing.
Meanwhile, Friday’s price action also affirms the 50-day SMA line act as support and as such, the technical setup remains bullish.
For the immediate session, the index will likely consolidate sideways near the 50-day SMA line.
As long as the index stays above the medium-term moving average line, the bulls should possess the technical advantage.
During this consolidation phase, we make no changes to our positive trading bias.
RHB advise traders to retain the long positions initiated at 1,455 pts, or the close of 3 Nov 2023.
To manage the trading risks, the trailing-stop is placed at 1,520 pts.
The first support is marked at 1,520 pts, followed by the 1,500-pt mark.
Towards the upside, the first resistance is still pegged at 1,550 pts, followed by 1,563 pts, ie the high of 28 Feb.
The Day Ahead
The FBMKLCI fell on Friday, but logged in 5.6% gains for the quarter and the FBM Small Cap rose 5.77% for the same period.
They believe the overall sentiment is turning more positively heading into 2Q24 with the domestic catalysts such as stable political environment, masterplans being executed as well as firmer commodities prices.
Meanwhile, in the US we think the core PCE numbers came in within expectations and likely the Fed will remain dovish and may cut 3 times over 2024.
On the commodity markets, Brent oil traded nearer towards USD87 amid ongoing geopolitical tension in the Middle East and extension of production cuts from OPEC+.
Besides, the gold price continues to extend its upward move above USD2230.
Sectors focus: MSSB will be releasing our market outlook for 2Q24.
They opine that the revival of mega infrastructure projects could benefit the Construction, Building Material and Property sectors.
Also, they like recovery theme stocks within the Banking, Consumer, Automotive, while commodity related such as O&G and Plantation will be riding their underlying commodity strengths.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher closing 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 1,550-1,555 and the support is set at 1,515-1,520.
FBM KLCI (Sideways with upward bias)
Kenanga Investment Bank (Kenanga) said today the FBMKLCI ended last week softer, dropping 6.32 points or 0.41% WoW to 1,536.07. Throughout March, foreign investment flows, which turned net sellers after being net buyers in the initial months of the year, significantly influenced the index’s trajectory.
Despite various challenges, including a slump in some small-cap stocks, a 2.9% depreciation of the MYR against the USD, and continuous foreign outflows in March, the index still achieved an impressive gain of 87.73 points or 5.6% in 1QCY24.
The market is expected to remain relatively quiet this week, continuing in a sideways consolidation pattern due to a lack of new corporate and economic data.
Focus remains on any new economic data that could influence US interest rate cut decisions, the forthcoming 1QCY24 US corporate earnings, and the direction of foreign fund flows.
These factors are key to gauging market momentum in the near term.
Technically, the FBMKLCI experienced a healthy pullback last week and yet remained above its 5-week SMA, indicating the upward trend is still in play despite the MCDX and RSI indicators showing a downtrend. While the index may test the short-term SMA support at 1,530 again, it’s expected to stay robust till week’s end.
A re-evaluation of Kenanga’s bullish stance will only occur if there’s a clear break below the 200-week SMA at 1,513.
In short, Kenanga expects the market to persist in its sideways trading pattern this week, albeit with a downward tilt. Immediate support levels are pegged at 1,530 and 1,513. Conversely, resistance levels are seen at 1,559 and 1,570.
CGS International (CGS) said Most Asian stock markets were closed for Good Friday.
The local benchmark FBMKLCI (KLCI) rebounded 5.47pts or 0.36% to end the day at 1,536.07.
Week-on-week, the index fell 6.32pts or 0.41%.
Sectors were broadly positive for the day barring plantation (-0.15%), consumer products (-0.08%) and REIT (-0.04%).
Energy (+0.99%) topped as the best performing sector followed by utilities (+0.85%) and technology (+0.58%).
Trading volume decreased to 3.06bn (down from 3.75bn on Wednesday) while trading value dropped to RM2.59bn (down from RM3.10bn previously).
Market breadth turned positive as 516 gainers beat 469 decliners.
The benchmark formed an inverted hammer last Friday, which potentially signal a bullish reversal.
The support trend line from the 1,518 low as well as the 50- day EMA continued to hold up.
They believe that the current sideways trend is part of the benchmark’s base-building phase, forming a nice base above the said 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.
