Bursa Malaysia May Extend Thursday’s Losses

Bursa Malaysia on Thursday snapped the six-day winning streak in which it had climbed almost 40 points or 2.5 percent.

The Kuala Lumpur Composite Index now sits just beneath the 1,570-point plateau and the losses may accelerate on Friday. 

At 9.15am, the FBMKLCI dipped -1.58 points to open at 1,567.67.

RHB Retail Research in a note today (Apr 26) said the FKLI resorted to consolidation after it staged a bullish breakout.

Yesterday, the index started off trading at 1,570.50 pts and after touching the day’s high at 1,572 pts, it fell to the day’s low at 1.565 pts before closing at 1,565.50 pts.

The latest bearish price action suggests the bullish momentum is taking a pause.

For the coming sessions, the index may move sideways and consolidate above the 50-day SMA line before momentum picks up again.

Should the selling pressure increase, the index may retrace towards the 1,530-pt support.

As long as it stays above the 1,530-pt support, the bullish setup will remain intact.

Consequently, RHB keeps the positive trading bias unchanged.

They recommend traders to retain the long positions initiated at 1,455 pts, or the close of 3 Nov 2023.

To minimise the trading risks, the trailing-stop is placed at 1,530 pts.

The immediate support is established at 1,530 pts, followed by 1,500 pts.

Conversely, the immediate resistance is pegged at 1,600 pts, followed by 1,650 pts.

Malacca Securities (MSSB) said The FBMKLCI (-0.14%) ended lower, due to the dull overnight performance on Wall Street while investors await a fresh catalyst from the upcoming corporate  earnings.

On the broader market, the Utilities sector (+1.01%) was the leading sector, while by the Industrial Products & Services sector (-0.66%) fell. 

The Day Ahead
The FBMKLCI snapped a 6-day winning streak as mild profit taking activities were  noticed in Industrial heavyweights, which affected the sentiment of the broader market.

Over in the US, selling pressure picked up led by META, coupled with softer than-expected 1Q US GDP data, that came in at 1.6%, below consensus.

MSSB expects the profit taking activities may extend on the local front and could capped the upside opportunity at least for the near term.

Nevertheless, they remain positive following the  KL20 summit, coupled with the announcement on EPF account 3, where it might provide a boost towards the consumption activities going forward.

On the commodity markets, Brent oil traded sideways along USD88, while gold price had a slight rebound above USD2330 and the CPO traded below RM3,900.  

Sectors focus: Still, the KL20 summit is a fresh catalyst for investors to position themselves within the Technology sector, as it may craft Malaysia into a chip powerhouse for the SEA region.

Besides, they favour the Construction, Property, Utilities, Solar and Building Material segments on the back of the revival of the mega  infrastructure projects and newsflow picked up on Forest City, as well as the stronger demand for renewable energy under NETR.

Bloomberg FBMKLCI Technical Outlook  
The FBMKLCI index ended lower after a strong rally. 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) Asian stocks snapped a three-day rally as tech shares fell after Meta Platforms’ disappointing outlook.

The local benchmark FBMKLCI (KLCI) shed 2.23pts or 0.14% to end the day at 1,569.25.

All sectors turned red yesterday except for utilities (+1.01%) and REIT (+0.89%).

FBMACE (-1.02%) led the decline followed by industrial products (-0.66%), telecommunications (-0.63%) and technology (-0.50%).

Trading volume decreased to 3.96bn (down from 4.25bn on Wednesday) while trading value eased to RM2.83bn (down from RM3.03bn

Market breadth turned negative as 443 gainers lost out to 581 decliners.

The benchmark gapped higher, but the bulls could not contain the selling pressure for the rest of the day.

The index closed marginally lower yesterday, possibly signalling that a pullback may be just around the corner.

In the near term, they expect the topside is likely capped by 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 (1,539 currently).

Their portfolio stays in riskon mode this week.

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