Bursa Malaysia has moved higher in three straight sessions, adding almost 25 points or 1.7 percent in that span.
The Kuala Lumpur Composite Index now sits just above the 1,625-point plateau and it may add to its winnings again on Tuesday.
At 9.16am, the FBMKLCI rose +0.88 points to open at 1,628.38.
RHB Retail Research in a note today (May 21) said the FKLI propelled higher yesterday, climbing another 8 pts to close at 1,627 pts and aiming towards the 1,650-pt level.
The index opened at 1,618.50 pts and rose strongly towards the intraday high of 1,637 pts, before partial profit-taking acitivites took place towards the close at 1,627 pts.
Two bullish sessions in a row signal strong momentum ahead, heading towards 1,650 pts.
This indicates the recent consolidation has ended, setting the stage for a continued uptrend towards the latter level.
Nevertheless, as mentioned in our previous note, short-term profit-taking activities will occur before the FKLI reaches the aforementioned 1,650 pts, given that the RSI is now at 74%, ie in overbought territory.
Capitalising on the latest bullish momentum, they maintain their bullish bias.
Malacca Securities (MSSB) said the FBMKLCI (+0.67%) ended higher as investors were still optimistic after the foreign fund’s inflow turned positive last week on a YTD basis, while the key index was lifted by PMETAL (+19.0 sen) amid the recent surge in aluminium spot
prices.
Meanwhile, the Construction sector (+2.46%) was the leading sector.
The Day Ahead
The overall local market conditions continued to stay bullish for most of the indices, charging towards fresh 52-week highs as foreign funds have turned net buy since last week on the YTD basis.
They believe buying momentum may persist with the ongoing trade diversions theme as the US imposed higher tariffs on China products.
Meanwhile, sentiment on Wall Street turned mixed; Nasdaq registered fresh all-time-high, but the Dow dipped for the session as the investors re-assessed statements from the Fed’s officials where some of the comments were slightly hawkish.
Nevertheless, this week, the key focus will be on Nvidia’s result. On the commodity markets, Brent oil rangebound along USD82-84 over the past week, while gold and silver traded near all-time high zone banking on the US rate cut expectations.
Sectors focus: Given the Nasdaq has traded to all-time-high, coupled with the ongoing trade war between US and China, they expect the market to focus on the Technology and EMS sectors in the local front, not forgetting the gloves companies.
Meanwhile, they think there could be trading potential in the Construction, Building Materials, Property, and Solar industries in view of potential revival of mega infra projects like the KL-SG HSR as well as optimism over the execution of NETR and NIMP master plans.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended higher, surpassing the 1,625 level. However, the technical readings on the key index were mixed with the MACD Histogram formed a rounding bottom and hovers around the 0 level, while the RSI maintains above 50.
The resistance is envisaged around 1,640-1,645 and the support is set at 1,605-1,610.
CGS International (CGS) said Asian stock markets started the week on positive note with Philippines’ PSEi (+0.97%) leading the rally.
The local benchmark FBMKLCI (KLCI) surged 10.88pts or 0.67% to end the day at 1,627.50. All sectors closed in positive territory led by construction (+2.46%), telecommunications (+1.53%) and industrial products (+1.52%).
Trading volume decreased to 6.98bn (down from 7.23bn on Friday) while trading value eased slightly to RM4.37bn (down from RM4.54bn previously).
Market breadth stayed positive as 840 gainers outweighed 460 decliners.
The bulls remained dominant, driving the benchmark to a new 3-year high yesterday (since 2021 on a close basis). Since the key 1,620-1,625 resistances are taken out, there are minimal barriers ahead until the 1,657-1,660 range.
On the downside, 1,610 being the resistance-turned-support followed by the 1,590-1,601 levels if any profit-taking sets in. Following support levels are at 1,582 and 1,565.
Their portfolio stays in risk-on mode this week.
