Rally May Stall For Bursa Malaysia

Bursa Malaysia has moved higher in six straight sessions, gathering almost 40 points or 2.5 percent along the way.

The Kuala Lumpur Composite Index now sits just above the 1,570-point plateau and it may be stuck in neutral on Thursday. 

At 9.16am, the FBMKLCI rose +1.81 points to open at 1,573.29.

RHB Retail Research in a note today (Apr 25) said the FKLI resumed its upside movement on Wednesday, climbing 11 pts to close at 1,571 pts – its strongest close since 5 May 2022.

The index started the session at 1,560.50 pts. It then moved higher throughout the session, closing at 1,571 pts, which was also the day’s high.

The price action saw the formation of a fresh “higher high” bullish candlestick, reaffirming that the bulls are still in the driver’s seat.

As the RSI is trending upwards, suggesting that bullish momentum is in play, the bulls are now eyeing the next resistance level at 1,600 pts.

Meanwhile, both the 50-day and 200-day SMA lines continued moving upwards, providing downside support for the index.

Given the bullish momentum, the house makes no changes to their positive trading bias.

Malacca Securities (MSSB) said the FBMKLCI (+0.63%) ended higher, due to the positive overnight performance on Wall Street amid the reduced geopolitical tension in the middle east, respectively.

On the broader market, the Property sector (+1.78%) was the leading sector, followed by the Healthcare sector (+1.73%) with no negative sector.

The Day Ahead
The FBMKLCI traded positively to close with a 6-day winning streak, supported by Utilities and Telco heavyweights.

Meanwhile in the US, despite the fading geopolitical tensions in the Middle East, the US Treasury yields saw an uptick and contributed to mixed trading activities on Wall Street.

Post-market, META share price dropped more than 15% as the company issued a softer revenue forecast going forward, but capex for 2024 will be increased to USD35-40bn as META will continue to accelerate the infrastructure investments to support the AI roadmap.

On the commodity markets, Brent oil traded along USD88, while gold price maintained around USD2310, without significant noise from the Middle East.

Besides, the CPO could be oversold around RM3950 and may be due for a rebound.

Sectors focus: Although the trading activities in the US were mixed and could see further selling pressure following META’s statements on lighter revenue forecast, MSSB expects buying support to persist on the local front as the KL20 summit is still fresh from the oven that may shape Malaysia into a chip powerhouse for the SEA region; this could provide upside opportunity towards the Technology sector.

Meanwhile, they still favour the O&G, Construction, Property, Utilities and Building Material segments on the back of revival of the infrastructure theme.

Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher for the sixth 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 1,585-1,590 and the support is set at 1,550-1,555.

CGS International (CGS) said most Asian stock markets climbed for its third day in a row on rising optimism about the tech sector and a less hawkish FED.

The local benchmark FBMKLCI (KLCI) added 9.84pts or 0.63% to end the day at 1,571.48.

All sectors saw gains yesterday, led by FBMACE (+2.19%), property (1.78%), healthcare (+1.73%) and technology (+1.55%).

Trading volume increased to 4.25bn (up from 3.73bn on Tuesday) while trading value improved to RM3.03bn (up from RM2.79bn previously).

Market breadth stayed positive as 777 gainers beat 327 decliners.

The benchmark pushed and closed at a new 23-month high yesterday as the bulls continued on their charge.

The KLCI may attempt to continue to work its way further towards the top end of our targeted range of 1,570-1,583 in the coming days.

On the downside, expect some support to come in near the 1,552-1,559 levels followed by the rising 50-day EMA (1,538 currently).

Their portfolio stays in risk-on mode this week.

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