Bursa Malaysia has moved higher in two straight sessions, gathering almost 10 points or 0.6 percent along the way.
The Kuala Lumpur Composite Index now sits just beneath the 1,545-point plateau although it may run out of steam on Friday.
At 9.17am, the FBMKLCI rose +1.92 points to open at 1,546.30.
RHB Retail Research in a note today (Apr 19) said the FKLI rebounded above the 50-day SMA line yesterday, closing 5 pts higher at 1,544.50 pts.
The index opened at 1,539 pts and dipped to the day’s low of 1,534 pts early in the session.
It then rebounded to the day’s high of 1,547.50 pts before retreating at the close.
The latest rebound has completely erased Tuesday’s losses, indicating that the rebound will persist.
The RSI has also re-entered positive territory at 51%, signalling improved bullish momentum.
If the FKLI stays above the ascending 50-day SMA line in the near term, the rebound will persist towards the 1,563-pt immediate resistance level.
As such, 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 1,520 pts, followed by 1,500 pts.
Conversely, the immediate resistance is pegged at 1,563 pts, with the higher resistance at 1,600 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.28%) ended higher, in line with the positive sentiment across the regional stock markets, despite the weak performance on Wall Street overnight.
On the broader market, the Utilities sector (+1.91%) was the leading sector, while the Energy sector fell (-0.75%).
The Day Ahead
The FBMKLCI extended its rebound for the second consecutive day as bargain hunting activities emerged in tandem with the movements of the broader market.
Meanwhile, sentiment on Wall Street turned more negative throughout the session with mixed economic data being released; (i) jobless claims were below consensus expectations, (ii) factory data beat estimates, and (iii) home sales were weaker than expectations.
On the commodity front, Brent oil price traded along USD86-87/bbl, while the CPO price fell below RM4000 amid expectations of risingoutput and slowing demand after the Eid al-Fitr festive season.
For the gold price, it is still hovering above USD2350.
Sectors focus: MSSB expect bargain hunting activities to persist on the local front with the traders shifting their focus towards defensive sectors like Utilities, REITs and Consumer, while investors may focus on companies with solid dividend yields.
Also, we like stocks in the gold sector as the underlying gold prices remain in the uptrend tone.
Other sectors that traders may focus on will be the Solar, Building Material, O&G and Packaging sectors.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher for the 2nd consecutive day. The technical readings on the key index were mixed, with the MACD Histogram extending another negative bar, while the RSI climbed 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 finished higher on Thursday led by Korea’s KOSPI (+1.95%).
The local benchmark FBMKLCI (KLCI) rose 4.34pts or 0.28% to end the day at 1,544.76. Most sectors rallied with the largest gains coming from utilities (+1.91%), healthcare (+0.78%) and REIT (+0.66%).
The top laggards were energy (-0.75%), telecommunications (-0.46%) and property (-0.21%).
Trading volume climbed to 3.84bn (up from 3.45bn on Wednesday) but trading value dropped to RM2.62bn (down from RM2.67bn previously).
Market breadth stayed positive as 570 gainers outperformed 469 decliners.
The benchmark continued its rebound and closed at the 20-day EMA with another white candle yesterday.
Tuesday’s gap was filled, and will Monday’s gap be next? A longer-term sideways consolidation is likely taking place right now until the bulls successfully close the overhead down gap.
However, a close below the 50-day EMA may warn of further weakness ahead.
Resistances are seen at 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.
IF the KLCI closes below 1,541 at the end of today, their portfolio will revert to risk-off next week.
