Bursa Malaysia bounced higher again on Thursday, one session after ending the three-day winning streak in which it had advanced almost 25 points or 1.7 percent.
The Kuala Lumpur Composite Index now sits just beneath the 1,630-point plateau although it’s likely to see renewed consolidation on Friday.
At 9.17am, the FBMKLCI dropped -4.75 points to open at 1,624.96.
RHB Retail Research in a note today (May 24) said the FKLI held strong at peak levels yesterday, climbing 7 pts to close at 1,629.50 pts and solidifying its overall uptrend above 1,600 pts.
The index opened lower at 1,620 pts, but strong buying pressure then emerged, which drove a robust rebound throughout the session – the FKLI even hit a high of 1,634 pts before the close.
This positive price action negated the potential pullback signaled during the previous session, which indicated volatile sessions ahead.
The RSI momentum indicator also showed improvement, but is now in overbought territory at 73% – posing profit-taking risks, which suggests potential whipsaw sessions between 1,650 pts and 1,600 pts.
For now, they maintain their bullish bias.
They advise traders to keep 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 1,600 pts.
The immediate support is set at the abovementioned 1,600 pts and followed by 1,575 pts.
Towards the upside, the immediate resistance is still pegged at 1,650 pts and followed by the 1,700-pt level.
Malacca Securities (MSSB) said the FBMKLCI (+0.44%) ended higher as the key index had seen buying interest in utilities heavyweights, TENAGA (+32.0 sen) & YTL (+6.0 sen) after NVIDIA posted stronger-than-expected earnings, which suggests that the AI optimism is still
intact and there are likely further investments in the power generation sector.
The Day Ahead
After a brief pullback, the FBM KLCI charged towards fresh 52-week high, with the support of Utilities heavyweights, while the FBM ACE started to break its 52-week high.
Meanwhile, sentiment on Wall Street was mixed despite (i) better-than- expected results from NVIDIA, (ii) better-than-expected manufacturing and services PMI data and softer-than-expected new homes sales.
Given the mixed trading on Wall Street, coupled with weaker QoQ results on the local corporate recently, they expect profit taking to emerge on the local exchange.
On the commodity markets, Brent oil traded lower with a negative bias trading environment and the upside is capped around USDD83-84.
Meanwhile, gold price extended the pullback and could be heading towards support of USD2324.
Sectors focus: With the solid uptrend tone on NVIDIA, we expect the buying interest to spillover towards stocks on the local front, specifically the Technology sector, coupled with the data centre related stocks.
Also, they believe Property stocks with huge land banks may bode well under the data centre theme.
Nevertheless, they still like the Construction, Building Materials, and Solar sectors with optimism over the ongoing execution of NETR and NIMP master plans.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index rebounded, close to breaching the 1,630 level.
The technical readings on the key index were mixed with the MACD Histogram extending another positive bar, while the RSI overbought.
The resistance is envisaged around 1,645-1,650 and the support is set at 1,610-1,615.
CGS International (CGS) said Asian stock markets finished mixed on Thursday amid the retracement of copper and gold prices.
The local benchmark FBMKLCI (KLCI) rose 7.09pts or 0.44% to end the day at 1,629.18.
Most sectors closed in the green except for healthcare (-0.29%). Notable gainers were transportation (+1.06%), energy (+1.02%) and utilities (+1.01%).
Trading volume increased to 6.16bn (up from 5.43bn on Tuesday) while trading value improved to RM4.68bn (up from RM4.23bn previously).
Market breadth turned positive once again as 732 gainers beat 521 decliners.
The benchmark closed at its 3-year high (since 2021 on a close basis) again yesterday after a short break the day before.
They see that the index is trying hard to pull away from the 1,620-1,625 levels, which we believe is a critical zone – either as a strong support or resistance to the current uptrend.
The next ceiling would be the 1,657-1,660 range, with a minor resistance at 1,642-1,646 if the critical zone of 1,620-1,625 level is taken out.
On the downside, 1,610 is the resistance-turned-support level followed by the 1,590-1,601 levels if any profittaking sets in.
Their portfolio stays in risk-on mode this week.
