Bursa Malaysia on Wednesday ended the four-day losing streak in which it had stumbled more than 25 points or 1.7 percent.
The Kuala Lumpur Composite Index now sits just above the 1,540-point plateau although it may head south again on Thursday.
At 9.16am, the FBMKLCI dipped -0.38 points to open at 1,539.84.
RHB Retail Research in a note today (Apr 18) said the FKLI rebounded from below the 50-day SMA line yesterday to close above it, gaining 6.50 pts to 1,539.50 pts – hovering near the SMA line.
The index opened higher at 1,535 pts and then dipped to the day’s low of 1,531.50 pts during the early session.
It then rebounded strongly towards the 1,540-pt day high before the close.
However, this rebound above the SMA line did not completely erase Tuesday’s losses, which suggests said rebound may be a short-lived one.
As the short-term bearish momentum is likely to persist, supported by the RSI in negative territory at 49%, the FKLI may retrace towards the 1,520-pt support, followed by a consolidation before rebounding again.
As long as the immediate support at 1,520 pts holds, they maintain their bullish bias.
They advise traders to retain the long positions initiated at 1,455 pts, which was the close of 3 Nov 2023.
To minimise the trading risks, the trailing-stop threshold is set at 1,520 pts.
The immediate support is at this 1,520-pt level and followed by 1,500 pts.
Conversely, the immediate resistance is pegged at 1,563 pts, with the higher resistance at the 1,600-pt mark.
Malacca Securities (MSSB) said the FBMKLCI (+0.35%) ended higher, tracking the stabilised performance on Wall Street overnight, despite the negative sentiment across the regional stock markets amid the ongoing geopolitical tensions.
On the broader market, the Construction sector (+1.64%) was the leading sector.
The Day Ahead
The FBMKLCI rebounded from a 4-day decline as bargain hunting activities emerged in tandem with the broader market except for the Property sector.
However, the US stock markets took another round of beatings and 3 major benchmark indices declined further as the market could be pricing in rate cuts delay towards September.
They believe this expectation may pose downside risk and profit taking activities may be observed on the local exchange.
On the commodity front, Brent oil price started to retrace below USD90, while the CPO price fell more than 1.5% due to weaker economic data from China offsetting the concerns over the geopolitical tensions.
The gold price maintained its uptrend tone above USD2360.
Sectors focus: Despite the better sentiment on the local front, the upside could be capped following the selldown in the US.
MSSB expect the investors to shift their focus back to the defensive related sectors such as the Consumer, Utilities and REITs.
Nevertheless, traders could position within the Technology, Construction and O&G stocks as momentum has regained within these segments.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index rebounded after a 4-day downtrend. The technical readings on the key index were negative, with the MACD Histogram extending another negative bar, while the RSI maintains below 50.
The resistance is envisaged around 1,555- 1,560 and the support is set at 1,520-1,525.
CGS International (CGS) said Asian stock markets finished mixed on Wednesday as bargain hunting activities took place in certain region after a 2-day sell off.
The local benchmark FBMKLCI (KLCI) recovered 5.42pts or 0.35% to end the day at 1,540.42.
Construction (+1.64%) led the sectors’ rebound yesterday followed by technology (+1.16%) and healthcare (+1.04%). Plantation (-0.56%) was the sole laggard.
Trading volume decreased to 3.45bn (down from 4.93bn on Tuesday) while trading value eased to RM2.67bn (down from RM3.72bn previously).
Market breadth turned positive as 717 gainers beat 318 decliners. The benchmark formed a white candle yesterday, underpinned by the 50-day EMA and the support trend line from the 1,518 low.
A longer-term sideways consolidation is likely taking place right now as the bulls may have to take some time to try to close the two overhead down gaps.
1,544 level (20-day EMA) being the immediate resistance followed by the 1,559 high and 1,570-1,583 next. Support levels are unchanged at 1,528 and 1,508-1,521 thereafter.
Their portfolio stays in risk-on mode this week.
