Bursa Malaysia May Spin Its Wheels On Tuesday

The Malaysia stock market has moved higher in three straight sessions, gathering almost 25 points or 1.5 percent along the way. The Kuala Lumpur Composite Index now sits just beneath the 1,560-point plateau although it may be stuck in neutral on Tuesday.

At 9.15am, the FBM KLCI had added 1.59 points to 1,561.57, from Monday’s close at 1,559.98. The benchmark index opened 0.07 point lower at 1,559.91.

On the broader market, gainers led decliners 225 to 185, while 321 counters were unchanged, 1,612 untraded, and nine others suspended.

Turnover amounted to 273.51 million units worth RM112.69 million.

RHB Retail Research’s Market Dateline said today (Apr 9) the FKLI is poised for a bullish breakout above the immediate resistance of 1,563 pts, having gained another 7 pts to close at 1,560.50 pts yesterday.

The index opened higher at 1,555.50 pts, and surged to the day’s high of 1,561.50 pts, before moderating slightly at the close. This bullish momentum marks the third consecutive session above the ascending 50-day SMA line, reinforcing its uptrend towards the 1,563-pt resistance – its highest level since 27 Feb.

With the RSI improving at 60%, there appears to be ample room for further bullish momentum, increasing the likelihood of a breakout before potentially reaching the 1,600-pt threshold. Therefore, we maintain our positive trading bias.

RHB advises traders to retain the long positions initiated at 1,455 pts, ie the close of 3 Nov 2023. To mitigate the trading risks, the trailing-stop threshold is set at 1,520 pts.

The first support is located at 1,520 pts, followed by 1,500 pts. Towards the upside, the nearest resistance is eyed at 1,563 pts, followed by the higher resistance of 1,600 pts.

FKLI’s daily chart

Malacca Securities (MSSB) said the FBMKLCI (+0.30%) ended higher, in line with the positive performance across the regional stock markets, as the index was led by Utilities and Banking heavyweights. On the broader market, the Utilities sector (+1.01%) gained, while the Energy sector (-0.62%) declined.

The Day Ahead

The FBMKLCI started another week on a solid tone supported by the buying interest within the Utilities heavyweight, while the FBM Small Cap hovered around its 52- week high zone.

However, Wall Street closed mixed as the US Treasury yield hit 4- month high and the market is trading cautiously ahead of a few significant economic data such as (i) CPI (Tue), (ii) PPI (Thu), (iii) jobs data (Thu) as well as the FOMC meeting minutes (Wed). These data will likely to shape the interest rate direction going forward. On the commodity front, Brent oil price fluctuate along USD88-91, steadied near USD91 zone.

Meanwhile, CPO price ended slightly below RM4,280, while gold price is hovering above USD2,300.

Sectors focus: Given the mixed sentiment from Wall Street, trading activities will be softer at least for this week amid a shortened trading week. Nevertheless, MSSB believes traders will focus on the Utilities as the data centre investments could drive electricity demand going forward.

Meanwhile, MSSB likes the Construction, Building Material and Property sectors with the expectations of more mega infrastructure projects to be announced this year. Also, they favour commodity-related stocks under the Plantation, O&G and Gold segments.

Bloomberg FBMKLCI Technical Outlook

The FBM KLCI index ended higher for the 3rd consecutive day. The technical readings on the key index were positive, with the MACD Histogram extending another positive bar, while the RSI maintains above 50. The resistance is envisaged around 1,565-1,570 and the support is set at 1,540-1,545.

CGS International (CGS) said Asian stock markets rallied on Monday amid strong US jobs data. The local benchmark FBMKLCI (KLCI) rose 4.73pts or 0.30% to end the day at 1,559.98.

Sectors-wise, utilities (+1.01%), property (+1.00%) and construction (+0.54%) were the top gainers. Weakness was seen in energy (-0.62%), transportation (- 0.48%) and industrial products (-0.35%).

Trading volume decreased to 3.97bn (down from 4.05bn on Friday) while trading value dropped to RM2.33bn (down from RM2.68bn previously).

Market breadth turned slight positive as 531 gainers marginally beat 511 decliners. The benchmark continued its rally following last Friday’s triangle breakout.

Yesterday’s white candle closed at a new 23-month high, retesting the 1,559 level. Any residual strength could potentially send the index higher to test the next resistance at 1,570-1,583.

Support is seen at 1,537, the most recent swing low followed by 1,528 and the critical support at 1,508-1,521. CGS’s portfolio stays in risk-on mode this week.

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