Bursa Malaysia has moved higher in four straight sessions, gathering almost 30 points or 2 percent in that span.
The Kuala Lumpur Composite Index now sits just above the 1,605-point plateau although it may run out of steam on Wednesday.
At 9.16am, the FBMKLCI rose +2.05 points to open at 1,606.96.
RHB Retail Research in a note today (May 8) said the FKLI surged past the 1,600-pt resistance to close at 1,609.50 pts.
The index began yesterday’s session at 1,600 pts.
After rising to the intraday high of 1,614 pts, the FKLI pulled back to close at 1,609.50 pts.
The latest breakout at 1,600 pts has strengthened the bullish setup.
With the RSI also trending upwards, they expect the index to extend its upside movement towards 1,650 pts.
If the index resorts to profit-taking, it may retrace to the 1,575-pt support level.
Both the 50-day and 200-day SMA lines continue moving higher, providing a downside buffer for the index.
As the bullish setup of “higher highs” and “higher lows” remains, they hold on to the positive trading bias.
They advise traders to keep the long positions initiated at 1,455 pts (the close of 3 Nov 2023).
To manage the trading risks, the trailing-stop threshold is set at 1,550 pts.
The immediate support remains at 1,575 pts, followed by 1,550 pts.
On the upside, the nearest resistance is pegged at 1,650 pts, followed by the higher resistance level of 1,700 pts.
Malacca Securities (MSSB) said the FBMKLCI (+0.52%) ended higher due to foreign institutional funds ramping up buying interest in the local bourse amid the positive market environment taking cue from the positive Wall Street performance.
On the broader market, the Utilities sector (+1.88%) was the leading sector.
The Day Ahead
The FBMKLCI maintained its upward trend, rising for 12 days over the past 14 trading days as buying support was seen within the Banking and Utilities heavyweights, while the FBM70 charged towards its all-time-high, suggesting that the overall market sentiment is bullish.
Over in the US, Wall Street ended mixed as the market digested the mixed batch of corporate earnings.
Meanwhile, the traders will be focusing on the upcoming unemployment claims later tonight and the consumer sentiment data will be released on Friday.
On the commodity markets, Brent oil traded in a rangebound mode around USD82-83, while the gold price traded mildly lower around USD2315 as the traders could be weighing on the ceasefire hopes.
For the CPO, it has performed a rebound above RM3,900.
Sectors focus: They believe the overall uptrend is intact, but given it has been rising significantly higher over the past two weeks, it may attract profit taking activities.
Nevertheless, we still like the Technology sector as more investments will be seen from big MNCs and should provide healthy sentiment towards the local markets.
Also, the data center investments will boost the demand for the Power industry and the NETR and NIMP masterplans will translate to trading opportunities within the Construction, Properties and Building Material sectors.
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 1,620-1,625 and the support is set at 1,585-1,590.
CGS International (CGS) said most Asian stock markets continued to rally on Tuesday led by Korea’s KOSPI (+2.16%).
The local benchmark FBMKLCI (KLCI) surged 8.29pts or 0.52% to end the day at 1,605.68.
Top gainers were seen in utilities (+1.88%), property (+1.58%) and transportation (+1.46%).
The only laggard for the day was construction (-0.20%).
Trading volume jumped to 5.42bn (up from 4.48bn on Monday) while trading value improved to RM3.79bn (up from RM3.12bn previously).
Market breadth stayed positive three days in a row as 684 gainers outperformed 455 decliners.
The benchmark gapped up for the third consecutive day and surpassed the 1,600 psychological levels yesterday with its fourth white candle.
The next strong resistance is seen at 1,620-1,625 and the market may attempt to give it a go today but they believe that the said resistance band is a tad too far for now.
Profit taking activities may start to show up in batches soon.
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. Their portfolio stays in risk-on mode this week.
