Bursa Malaysia has moved higher in three straight sessions, gathering more than 20 points or 1.4 percent in that span.
The Kuala Lumpur Composite Index now sits just beneath the 1,600-point plateau and it’s tipped to open in the green again on Tuesday.
At 9.15am, the FBMKLCi rose +3.46 points to open at 1,600.85.
RHB Retail Research in a note today (May 7) said the FKLI extended the upside movement during Monday’s session, climbing 5 pts to close at 1,599 pts – it now eyes to cross above the 1,600-pt resistance.
The index began trading at 1,596 pts.
After setting its intraday low at 1,590 pts, the FKLI bounced to the 1,602-pt day high and closed at 1,599 pts.
This latest positive price action, coupled with the rising RSI, affirms that the bulls are gripping the index stronger – RHB now expect a follow-through price action to break past the 1,600-pt psychological resistance.
In the event the FKLI resorts to profit-taking, it may pull back towards 1,575 pts.
For now, both the 50- and 200-day lines are acting as downside supports as the index continues moving upwards.
As the technical setup remains bullish, they retain the positive trading bias.
They recommend traders hold on to the long positions initiated at 1,455 pts or the close of 3 Nov 2023.
To minimise the trading risks, the trailing-stop threshold is fixed at 1,550 pts.
The immediate support is revised higher to 1,575 pts and followed by the abovementioned 1,550 pts.
Conversely, the immediate resistance is revised to 1,650 pts and followed by higher resistance of 1,700 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.49%) ended higher due to buying interest in the Banking heavyweights, as foreign institutional funds has ramped up buying interest in the local bourse amid the positive market environment, thus the largest members of the
KLCI index became the prime beneficiaries.
The Day Ahead
The FBMKLCI has surged strongly for another session as buying interest was noted within the Banking heavyweights and most of the stocks in the broader market have marked fresh 52-week highs.
Meanwhile, Wall Street ended on a more positive note after last week’s nonfarm payroll came in below expectations in April, while unemployment ticked higher; this data has suggested that the economy may have cooled and the Fed’s rate cut may still be on the table for now.
On the commodity markets, Brent oil traded within the USD83-84 support zone, while the gold price is located above USD2320.
Meanwhile, CPO price performed a rebound above RM3,800.
Sectors focus: Given the optimism on the local front, coupled with the positive rebound from Wall Street, MSSB expects traders to focus on the Technology sector as more investments from big MNCs could be expected in the near term.
Also, the Data Center investments may spur buying interest within the Power Distribution industry.
Also, they like the Construction, Properties and Building Material with the ongoing mega infrastructure projects and the optimism over NETR and NIMP master plans.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index ended higher to a fresh 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 1,610-1,615 and the support is set at 1,580-1,585.
CGS International Asian stock markets were mostly higher on Monday led by technology stocks.
The local benchmark FBMKLCI (KLCI) added another 7.80pts or 0.49% to start the week at 1,597.39.
Most sectors ended positively barring energy (-0.43%), plantation (-0.36%), healthcare (-0.13%) and consumer products (-0.01%).
The largest gainers were utilities (+1.88%), property (+1.41%), transportation (+1.28%) and technology (+1.14%).
Trading volume increased to 4.48bn (up from 3.91bn on Friday) but trading value eased marginally to RM3.12bn (down from RM3.15bn previously).
Market breadth stayed positive as 657 gainers beat 447 decliners.
The benchmark gapped up for the second consecutive day to form a 3 white soldiers pattern (bullish pattern).
The KLCI is also just shy of hitting the 1,600 psychological levels and we think that the bulls are keen to test this level.
Although the benchmark is now overbought, a move into the 1,600-1,607 levels is likely.
The next strong resistance is seen at 1,620-1,625.
Support is likely found within the 1,582-1,591 levels if a pullback takes place in the near term.
The following support is at 1,565. Theirr portfolio stays in risk-on mode this week.
