Bursa Malaysia May Run Out Of Steam On Monday

Bursa Malaysia has moved higher in three straight sessions, gathering more than a dozen points or 0.8 percent along the way.

The Kuala Lumpur Composite Index now sits just beneath the 1,550-point plateau although it may spin its wheels on Monday.

At 9.16am, the FBMKLCI rose +0.81 points to open at 1,548.57.

RHB Retail Research in a note today (Apr 22) said the FKLI staged a strong rebound from the 50-day SMA line on Friday, climbing 3 pts to close higher at 1,547.50 pts.

The index initially began trading at 1,544 pts. It then formed the intraday low at 1,537 pts and climbed to the intraday high at 1,552 pts before closing Friday’s session at 1,547.50 pts – forming a bullish candlestick.

They observe the “long lower shadow” intersected at the 50-day SMA line, showing the medium-term technical setup remains bullish.

As long as the index stays above this SMA line, the bulls will possess the technical advantage.

As the RSI is rounding upwards, showing the bullish momentum is rising, the index is now eyeing to test the 1,563-pt immediate resistance.

Meanwhile, towards the downside, the 1,530-pt support has strengthened. As such, for now, we hold on to the bullish trading bias.

RHB recommend traders to keep to the long positions initiated at 1,455 pts, which was the close of 3 Nov 2023.

To minimise the trading risks, the trailing-stop is adjusted higher at 1,530 pts from 1,520 pts.

The immediate support has been changed to 1,530 pts, while lower support is marked at 1,500 pts.

Meanwhile, the immediate resistance remains unchanged at 1,563 pts, with the higher resistance at 1,600 pts.

Malacca Securities (MSSB) said the FBMKLCI (+0.18%) ended higher, as the index was supported by PMETAL (+16.0 sen) amid the rising tension in the Middle East which pushed aluminium prices towards 2022 highs.

On the broader market, the Energy sector (+1.81%) was the leading sector, while the Technology sector fell (-1.74%).

The Day Ahead
The FBMKLCI extended its rebound for the third session. Meanwhile, the US Tech sector was hit the hardest given the market could be pricing in further delay on the interest rate cut by the Fed after the stronger than expected economic data and elevated inflationary pressure.

Generally, the higher-for-longer environment could pose downside risk towards the stock markets, capping the upside momentum on the local front.

Nevertheless, traders will be focusing on several key events with the US GDP due on Friday, and several corporate earnings like Tesla, Meta, Microsoft and Alphabet will be released this week.

On the commodity markets, Brent oil retraced from intraday high of USD90.7, to close around USD87, while the gold price traded along USD2400.

However, the FCPO traded below the RM4000 level.

Sectors focus: As the US Technology sector was bashed lower on Friday, it may cap the upside move on the local tech stocks.

They expect given the spike in the Brent crude oil price, the oil and gas sector will stay attractive and may push higher in the near term.

Meanwhile, MSSB think investors may be focusing on the defensive sector such as Utilities and Consumer. Also, they favour selected stocks within the Automotive and Shipping sectors.

Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher for the third 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 most Asian stock markets finished lower on Friday as concerns raised over the Middle East tensions and hawkish Fed.

The local benchmark FBMKLCI (KLCI) inched up 2.81pts or 0.18% to end the day at 1,547.57.

Week-on-week, however, the index ended 3.47pts or 0.22% lower.

The broader market took a hit with the largest losses coming from technology (-1.74%), construction (-1.29%) and property (-1.22%).

On a positive note, energy (+1.81%), plantation (+0.29%) and industrial products (+0.02%) were the top gainers.

Trading volume increased to 4.71bn (up from 3.84bn on Thursday) while trading value improved to RM3.40bn (up from RM2.67bn previously).

Market breadth turned negative as 289 gainers lost out to 918 decliners. The benchmark gapped up and filled last Monday’s gap on Friday

However, the bulls pared its intraday gains and closed barely above the 20-day EMA.

CGS maintain their view that a longer-term sideways consolidation is likely taking place right now with the resistances are seen at the 1,559 high and 1,570-1,583 next.

On the downside, a close below the 50-day EMA may warn of further weakness ahead.

Support levels are unchanged at 1,528 and 1,508-1,521 thereafter. Their portfolio stays in risk-on mode this week.

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