Bursa Malaysia bounced higher again on Friday, one day after ending 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 above the 1,575-point plateau and it’s looking at another solid start on Monday.
RHB Retail Research in a note today (Apr 29) said the FKLI extended the upside movement during last Friday’s session, climbing 10 pts to close stronger at 1,575.50 pts and firming its position above the 1,530-pt support.
The index started off at 1,563 pts.
After setting its foothold at the 1,560.50-pt day low, it rose to the 1,580-pt day high and closed at 1,575.50 pts – charting a fresh bullish candlestick.
The latest “higher high” candlestick, coupled with the RSI pointing upwards, indicates the bullish momentum is now in play and growing stronger.
The bulls are now setting their sights on testing the 1,600-pt psychological resistance.
Breaching this threshold would attract further buying pressure and propel the FKLI towards 1,650 pts.
Meanwhile, both the 50- and 200-day SMA lines continue to move upwards, strengthening the bullish setup.
For now, they keep the positive trading bias unchanged.
They advise traders to hold on to the long positions initiated at 1,455 pts or the close of 3 Nov 2023.
To manage the trading risks, the trailing-stop threshold is set at 1,530 pts.
The immediate support is adjusted to 1,550 pts and followed by the abovementioned 1,530 pts.
Meanwhile, the immediate resistance remains unchanged at 1,600 pts, followed by 1,650 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.38%) ended higher despite the poor performance on Wall Street overnight. The index was likely supported by the local PPI data coming in stronger-than-expectations suggesting resilient economic activities.
The Utilities sector (+1.81%) was the leading sector supported by the YTL counters.
The Day Ahead
After a 1-day pullback, the FBMKLCI regained its upward move and closed at a fresh 52-week high, while the FBM Small Cap is overall bullish as well.
Similarly, the uptrend move on Wall Street has returned after Microsoft and Google registered better-than-expected results, while the core PCE data were within consensus estimates.
This week, traders will be focusing on earnings from Amazon, Apple, Qualcomm and AMD, which are related to the Technology sector, while Mastercard, McDonald, Starbucks, Coca-Cola will be monitored under the Consumer sector.
On the commodity markets, Brent oil remained rangebound along USD87-88, while gold price traded above USD2330 and the CPO is hovering below RM3,900.
Sectors focus: Generally, all the sub-indices have recorded 52-week highs this year, except for the Technology and Telco sector. Hence, MSSB believe they might be playing catch up in view of the positive broader market, coupled with the KL20 summit catalyst, where Malaysia will be focusing on the Technology ecosystem going forward.
Also, they like the Construction, Property, Utilities, Solar and Building Material segments on the back of higher demand for renewable energy under NETR, while they expect decent recovery in the mega infra projects this year.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index charged higher above the 1570 level. 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 1,590-1,595 and the support is set at 1,555-1,560.
CGS International (CGS) said most Asian stocks market rebounded on Friday after strong corporate earnings from tech giants (Microsoft and Alphabet) in the US.
The local benchmark FBMKLCI (KLCI) rose 5.91pts or 0.38% to end the day at 1,575.16. Week-onweek, the index jumped 27.59pts or 1.78%.
Most sectors rallied on Friday except for financial services (-0.35%) and plantation (-0.31%). Outperformers were seen in utilities (+1.84%), transportation (+0.74%) and technology (+0.69%).
Trading volume advanced to 4.11bn (up from 3.96bn on Thursday) while trading value improved to RM3.25bn (up from RM2.83bn previously). Market breadth turned positive as 621 gainers outweighed 466 decliners.
The bulls resumed strength and sent the benchmark to close at its new 23-month high on Friday. They expect the topside is likely capped by 1,570-1,583 in the coming days given the strong rally over the past weeks or so.
Potential pullback could be just around the corner. On the downside, expect some support to come in near the 1,552-1,559 levels followed by the rising 50-day EMA (1,540 currently). Their portfolio stays in risk-on mode this week.
