Bursa Malaysia May Tick Higher On Thursday

Bursa Malaysia on Wednesday ended the three-day winning streak in which it had gathered almost 20 points or 1.3 percent.

The Kuala Lumpur Composite Index now sits just shy of the 1,540-point plateau, although it may see mild upside again on Thursday.

At 9.15 am, the FBMKLCI rose +1.13 points to open at 1,538.98.

RHB Retail Research in a note today (Apr 4) said the FKLI failed to resume its uptrend yesterday, experiencing a sharp correction towards the 50-day SMA line and closing at 1,540 pts – down 12 pts.

The index opened lower at 1,550 pts, reaching a session low of 1,537 pts before settling at 1,540 pts.

The recent bearish candlestick, combined with the RSI falling near the 50% level, indicates that the near-term bullish momentum has weakened, possibly leading to a correction towards the 50-day SMA line or 1,530 pts.

This is followed by the critical support at 1,520 pts.

RHB anticipate a consolidation near the SMA line before any potential rebound can resume the medium-term uptrend.

Their positive trading bias remains intact unless the immediate support at 1,520 pts is breached.

They recommend traders hold on to the long positions initiated at 1,455 pts, ie the close of 3 Nov 2023.

To minimise the trading risks, the trailing-stop threshold is fixed at 1,520 pts.

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

Meanwhile, the immediate resistance is set at 1,563 pts while the higher resistance is pegged at 1,600 pts.

Malacca Securities (MSSB) said the FBMKLCI (-0.71%) ended lower, in line with the negative performance across the regional stock markets, as the index was dragged by Banking heavyweights.

On the broader market, the Energy sector (+0.95%) gained, while the Financial Services sector (-1.20%) declined.

The Day Ahead
The FBMKLCI snapped 3-day winning streak as profit taking activities emerged on Banking heavyweights, while the FBM Small Cap charged higher, marking its fresh 52-week high.

Meanwhile, the US stock markets ended on a mixed note where the Dow fell 0.11%, but the S&P500 and Nasdaq rose 0.11% and 0.23%, respectively following a mixed bag of economic data; the ADP’s non-farm employment added
184k jobs (vs. estimate of 148k), while ISM services PMI came in at 51.4 (below consensus of 52.8).

On the commodity front, Brent oil gained momentum, rising near the USD90 zone, while the FCPO closed above RM4,400.

Besides, the gold price ended at another all-time-high above RM2,300.

Sectors focus: Despite the mixed sentiment abroad, we expect market to stabilise and trade on a positive note on the local front within the commodity-related sectors such as O&G, Plantation and Gold-related supported by their respective firm underlying commodity prices.

Meanwhile, MSSB like selected Construction, Building Material and Property stocks as well as selected Healthcare stocks.

Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended lower after a 3-day rebound.

The technical readings on the key index were mixed, with the MACD Histogram turned positive, while the RSI is slightly below 50.

The resistance is envisaged around 1,550-1,555 and the support is set at 1,515-1,520.

CGS International (CGS) said Selling pressure weighed on Asian stock markets on Wednesday as investors tuned down rate-cut expectations.

The local benchmark FBMKLCI (KLCI) erased 10.98pts or 0.71% to end the day at 1,537.01.

Top laggards for the day were financial services (-1.20%), property (-0.59%) and technology (-0.22%).

On the flip note, energy (+0.95%), construction (+0.68%) and transportation (+0.62%) were the top gainers.

Trading volume dropped to 4.27bn (down from 4.53bn on Tuesday) whereas trading value improved to RM2.88bn (up from RM2.82bn previously).

Market breadth turned negative as 480 gainers dragged by 592 decliners.

The benchmark formed a black candle yesterday just as expected.

The current consolidation (in a triangle pattern) above the 50-day EMA is likely to continue for a while longer, probably for a couple more days.

However, do note that their triangle view (sideways) would need to be reviewed if the KLCI falls below 1,528.

The 1,550 psychological level remains as the overhead resistance.

Once this consolidation ends, CGS expect the KLCI to break out of its consolidation to test the next resistance 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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