Bursa Malaysia May Stop The Bleeding On Thursday

Bursa Malaysia has ticked lower in three straight sessions, slipping almost 10 points or 0.6 percent along the way.

The Kuala Lumpur Composite Index now sits just beneath the 1,610-point plateau although it’s likely to find support on Thursday. 

At 9.16am, the FBMKCLI rose +3.41 points to open at 1,612.58.

RHB Retail Research (RHB) in a note today (June 13) said the FKLI continued moving sideways during Wednesday’s session, retracing 1 pt to close at 1,610 pts.

The index started off the session at 1,609.50 pts. After trading within a tight range of 1,615.50 pts and 1,607.50 pts, it closed at 1,610 pts.

The narrow body of the candlestick suggests both bulls and bears shared equal strength.

Meanwhile, the RSI indicator is rounding downwards, showing the momentum is slowing down.

Hence, the index is likely to extend the consolidation phase in the coming sessions.

As mentioned in the previous note, the index may find support at the 1,600-pt level. As long as it stays above this critical threshold, the bullish setup is deemed intact.

For now, they will hold on to the positive trading bias.

RHB advised traders to retain the long positions initiated at 1,455 pts (the close of 3 Nov 2023).

To manage the trading risks, the trailing-stop threshold is placed at 1,600 pts.

The immediate support locates at 1,600 pts, followed by 1,575 pts.

Conversely, the nearest resistance is eyed at 1,637 pts – 20 May’s high – followed by 1,650 pts.

Malacca Securities (MSSB) said the FBMKLCI (-0.16%) ended lower, erasing gains throughout the session, suggesting that the bullish sentiment is tamed by uncertainties prior to the 2-day FOMC meeting.

Meanwhile, the Technology sector (+4.29%) was the leading sector as the sector tagged along the positive sentiment from NVIDIA and Apple’s WWDC.

The Day Ahead
Again, the FBM KLCI closed in the negative territory, but FBM 70 charged higher, while FBM Small Cap saw some profit taking activities.

Over in the US, Wall Street closed relatively positive with S&P500 and Nasdaq registered its record highs supported by cooler-than-expected CPI and core CPI numbers.

Even though the Fed kept the interest rate unchanged and is looking at 1 rate cut in 2024, the market is expecting more rate cuts this year due to declining inflationary numbers.

On the commodity markets, Brent oil is traded back into the USD81-84 zone, which is healthy for oil producers, while the gold price is forming a bear flag formation after the FOMC meeting.

The CPO price continues to stay within a tight range between RM3900-4000.

Sector focus: Despite FBM Small Cap pulling back, and noticed several downward swings in the power distribution segments, MSSB remained positive on the Technology sector namely the HDD, cloud, cybersecurity segments driven by the solid investments for data centers in Malaysia by several MNCs.

Meanwhile, they believed traders will remain positive on Johor region Property players with the potential of land sale deals going forward, while other sectors that may benefit from this catalyst will be the Construction, Building Material, Utilities, and RE sectors.

Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index dipped below the 1,610 level.

The technical readings on the key index were mildly positive with the MACD Histogram hovering around the 0 level, while the RSI maintains above 50.

The resistance is envisaged around 1,625-1,630 and the support is set at 1,590-1,595.

CGS International (CGS) said Asian stock markets finished mixed on Wednesday amid weaker-than-expected China inflation data.

The local benchmark FBMKLCI (KLCI) dipped 2.54pts or 0.16% to end the day at 1,608.95.

The broader market was dragged lower by transportation (-1.69%), energy (-1.15%) and utilities (-0.71%).

Top gainers for the day included technology (+2.06%), telecommunications (+0.53%) and construction (+0.26%).

Trading volume rose to its year-high at 7.59bn (up from 6.98bn on Tuesday) while trading value improved to RM5.28bn (up from RM5.12bn previously).

Market breadth turned negative as 550 gainers underperformed 758 decliners.

The benchmark sit right on the 20-day EMA after forming its third black candle yesterday.

They reckoned that the index may stay rangebound in the near term with support seen at 1,590-1,600 levels.

The index needs to overcome and close above 1,622 to confirm the swing up to retest of the 52-week high at 1,632 and beyond.

The immediate resistance at 1,620-1,625 is a long-term resistance and is likely to take some time before the bulls can muster the strength to breakout.

Their portfolio stays in risk-on mode this week.

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