Bursa Malaysia May Run Out Of Steam On Tuesday

Bursa Malaysia has finished higher in back-to-back sessions, gathering almost 15 points or 1 percent along the way.

The Kuala Lumpur Composite Index now sits just shy of the 1m545-point plateau, although the rally may stall on Tuesday.

At 9.15am, the FBMKLCI dipped -0.49 points to open at 1,543.53.

RHB Retail Research in a note today (Apr 2) said the FKLI staged another rebound on Monday, closing 4.50 pts higher at 1,545 pts and solidifying its uptrend structure above the 50-day SMA line.

At the start of the week, the index started off trading at 1,541 pts and ascended to an intraday high of 1,548.50 pts before experiencing a moderate retreat by the close.

The latest bullish candlestick confirms the recent rebound following a pullback, maintaining the FKLI’s position above the ascending 50-day SMA line.

The bullish price action suggests a continuation of the uptrend towards the 1,550-pt resistance, followed by the recent high at 1,563 pts.

Furthermore, the medium-term bullish momentum is reinforced by the RSI hovering at the 55% level, ie in positive territory.

With the firming up of the uptrend structure above the 50-day SMA line, RBH uphold their positive trading bias.

They advise traders to retain the long positions initiated at 1,455 pts or the close of 3 Nov 2023.

To mitigate the trading risks, the trailing-stop is set at 1,520 pts.

The first support is marked at the aforementioned 1,520 pts and followed by 1,500 pts.

Towards the upside, the first resistance is still pegged at 1,550 pts and followed by 1,563 pts, ie the high of 28 Feb.

Malacca Securities (MSSB) said the FBMKLCI (+0.52%) ended higher, in line with the mostly positive performance across the regional stock markets, as the index was led by Consumer Products, Telco and Utilities heavyweights.

On the broader market, the Utilities sector (+0.89%) gained, while the Construction sector (-0.81%) declined.

The Day Ahead

The FBMKLCI rebounded yesterday for the second consecutive day, while the FBM Small Cap charged towards another 52-week high.

Meanwhile the US stock markets ended on a mixed note with Dow Jones and S&P500 were dragged lower amid worries over the timing of interest rate cuts by the Feds after a stronger-than-expected manufacturing that pushed Treasury yield higher.

Moreover, the dollar index headed higher for another session, hovering around 105 zone.

On the commodity markets, Brent oil traded positively above the USD87/bbl, factoring positive demand signals from China and tight supply, while the FCPO price is hovering along RM4250 zone.

Sectors focus: MSSB believe the market may focus on the small cap stocks at least for the near term, while upside of the KLCI may be limited for now.

The traders may be focusing on data centre related proxy within the power distribution industry as they noticed heavy trading volume was noticed in this segment.

Also, they like the Poultry sector with the recovery signals coming from China.

Other sectors that they favour include Property, Building Material, O&G, and Plantation riding their underlying commodity strengths.

Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher.

The technical readings on the key index were turning positive, with the MACD Histogram forming a rounding bottom formation, and the RSI has crossed above 50.

The resistance is envisaged around 1,560-1,565 and the support is set at 1,525-1,530.

CGS International (CGS) said Asian stock markets started the week mixed after long Easter weekend with Indonesia’s JCI (-1.15%) and Japan’s Nikkei 225 (-1.40%) topping the decliners’ list.

The local benchmark FBMKLCI (KLCI) climbed another 7.95pts or 0.52% to end the day at 1,544.02. Sectors stayed mostly positive, in line with the benchmark KLCI.

Utilities (+0.89%), consumer products (+0.72%) and transportation (+0.52%) led the gainers while on the flipside, the laggards were construction (-0.81%), property (-0.15%) and telecommunications (-0.11%).

Trading volume increased to 3.18bn (up from 3.06bn on Friday) but trading value dropped to RM2.13bn (down from RM2.59bn previously).

Market breadth stayed positive as 577 gainers beat 465 decliners.

The benchmark pulled further away from the last week’s low of 1,528, continuing on its sideways consolidation from the 1,559 highs.

As long as stays above the 50-day EMA, they expect the current base-building phase to stay intact before the next wave up takes place.

Near-term, the bulls may attempt to test the 1,545-1,550 immediate resistance before pushing on to tackle the 20-month high at 1,559 and beyond.

The longer-term resistance is placed at 1,570-1,583.

Support is seen at 1,525-1,531 followed by the critical support at 1,508-1,521. Their portfolio stays in risk-on mode this week.

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