Bursa Malaysia has moved higher in two straight sessions, gathering almost 15 points or 0.9 percent in that span.
The Kuala Lumpur Composite Index now sits just beneath the 1,590-point plateau and it may see continued strength on Monday.
At 9.16am, the FBMKLCI rose +2.21 points to open at 1,591.80.
RHB Retail Research in a note today (May 6) said the FKLI extended the upside movement on Friday’s session, rising 9.50 pts to settle at 1,594 pts.
The index opened at 1,585.50 pts. After printing the day’s low of 1,579 pts, it rose to the day’s high of 1,595 pts before closing.
The latest “higher high” bullish candlestick coupled with the rising RSI shows that the bulls are growing stronger.
The bulls are setting their sights on testing the 1,600-pt resistance.
Breaching this psychological resistance will open the door for an upside movement towards 1,650 pts.
Meanwhile, the both 50- and 200-day lines continue to trend north, thereby strengthening the bullish setup.
They advise traders to maintain the long positions initiated at 1,455 pts or the close of 3 Nov 2023.
To manage the trading risks, the trailing-stop has been adjusted upwards to 1,550 pts, from 1,530 pts.
The immediate support is marked at 1,550 pts, followed by 1,530 pts.
Towards the upside, the nearest resistance is at 1,600 pts, followed by 1,650 pts.
Since the bullish setup remains in sight, RHB makes no change to their positive trading bias.
Malacca Securities (MSSB) said the FBMKLCI (+0.59%) ended higher due to buying interest in the Utilities sector (+1.53%) which led the bourse, as investors could be pricing in further upside following the RM10bn local investment announcement from Microsoft on AI and cloud infrastructure; the Technology sector rose 1.24%.
The Day Ahead
With the sustained net buying interest from foreigners, the FBM KLCI managed to trade towards a fresh 52-week high, supported by the Utilities sector in view of stronger electricity demand.
Meanwhile, the Wall Street regained interest with softer-than-expected jobs data, coupled with the positive boost from Apple’s results as well as biggest share buyback.
However, Warren Buffett’s Berkshire Hathaway announced that it has reduced stake in Apple by 13% in its AGM and the group has cash, cash equivalent and short term Treasurys totalled to USD189bn.
This week, the traders could be monitoring (i) unemployment claims and (ii) consumer sentiment.
On the commodity markets, Brent oil further retraced and traded nearer to USD83, while the CPO continues to see base support near RM3,800.
Sectors focus: Given the positive rebound on Wall Street supported by the better-than-expected results from selected tech giants, the buying interest may sustain over the near term within the Technology sector.
Also, they like the Utilities sector as the data centre investment should boost electricity demand going forward.
Besides, they favour the Construction, Property, Solar and Building Material segments with the catalyst like the potential revival of mega infra projects and the ongoing execution of the NETR and NIMP masterplans.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher to a 52-week high. 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 1,605-1,610 and the support is set at 1,570-1,575.
CGS International (CGS) said most Asian stock markets finished higher on Friday ahead of the release of the US jobs data.
The local benchmark FBMKLCI (KLCI) rose 9.29pts or 0.59% to end the day at 1,589.59.
Week-on-week, the index surged 14.43pts or 0.92%. The broader market was largely positive for the day with the largest gains coming
utilities (+1.53%), technology (+1.24%) and healthcare (+1.19%).
On the flip note, plantation (-0.47%), REIT (-0.39%) and property (-0.10%) were the laggards.
Trading volume increased to 3.91bn (up from 3.81bn on Thursday) while trading value climbed to RM3.15bn (up from RM3.06bn previously).
Market breadth turned positive as 644 gainers outweighed 417 decliners.
The benchmark gapped up and closed at its 2-year high last Friday as buying interest continued to pick up.
The index may have room to propel further with the 1,600 psychological level acting as the next resistance.
Furthermore, the KLCI has yet to reach its overbought levels, implying that the overall market is not overheated.
Near-term support is seen at the 1,565 level, followed by the 1,552- 1,559 levels. Their portfolio stays in risk-on mode this week.
