The FBM KLCI (+0.04%) closed slightly higher as the index was lifted by buying pressure within the Banking heavyweights.
Malacca Securities (MSSB) on a note today (Aug 18) said that on the broader market, however, mostly were traded lower as trading activities were noticeably softer after the market rout last week, but the Financials (+0.36%) sector was one the best sectors.
At 9.15, the FBMKLCI rose +9.26 points to open at 1,622.20.
The FKLI experienced mild selling pressure on Thursday but managed to keep its position above the 1,600-pt threshold, said RHB Retail Research (RHB).
The index began trading at 1,617 pts, and traded within a tight range of 1,620 pts and 1,610.50 pts before closing at 1,616.50 pts.
Based on the price action, market sentiment is neutral.
However, as the FKLI is trading above the 50-day SMA line, the bulls still have the technical advantage.
For upcoming sessions, the index may resume the upside movement by testing the 1,630-pt resistance.
Breaching this immediate resistance will attract further buying pressure.
On the other hand, should the FKLI resort to a consolidation, it may pull back and retest the 1,600-pt support.
In a bullish environment, support tends to be strong.
As long as the index stays above the 1,570-pt support, the technical setup will be deemed as bullish.
For now, RHB said they make no change on the positive trading bias.
Additionally, they recommended traders keep to the long positions initiated at 1,565.50 pts or the close of 6 Aug.
To manage the trading risks, the stop-loss threshold is fixed at 1,570 pts.
The nearest support is adjusted higher to 1,600 pts.
The lower support is marked at the abovementioned 1,570 pts.
Conversely, the immediate resistance remains unchanged at 1,630 pts and followed by 1,644 pts, ie the high of 18 Jul.
The Day Ahead
MSSB said the most indices turned negative, except for the FBM KLCI, which managed to recover marginally at the end of the session due to buying support in banking heavyweights.
Meanwhile, US stock markets ended strongly after assessing declining US CPI and
PPI data earlier this week, coupled with stronger-than-expected retail sales.
This optimism brushed off economic recession concerns and raised expectations that the Fed will cut rates by 25 basis points in the upcoming September FOMC meeting.
They believed this buying support may also return to local stocks.
In the commodity markets, Brent oil rebounded in light of better-than-expected economic data, while gold prices trended higher above the USD2,450 zone.
The CPO prices are trending sideways around RM3,600-3,700.
Sectors Focus: With the positive setup in the US, they expected buying support to emerge within the local Technology sector.
As RHB headed into earnings season, they also favour the Construction, Property, Building Materials, and Utilities sectors, which are benefiting from data center and AI themes.
Additionally, they believed banking stocks could trend higher ahead of the Malaysia GDP data, and the stronger ringgit is expected to benefit the Consumer sector.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended flat at the 1,612 level.
The technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI stayed above 50.
The resistance is envisaged around 1,627-1,632 and the support is set at 1,592-1,597.
Maybank Investment Bank (Maybank) said the FBMKLCI Index advanced for the fifth straight day.
Nonetheless, only the financial and healthcare sectors managed to remain positive.
At day’s end, the FBMKLCI Index advanced 0.59pts, or 0.04%, to close at 1,612.94pts, led by CIMB, PBBANK, and YTL.
Market breadth, however, was negative, with losers outnumbering gainers by 768 to 285.
A total of 3.57b shares worth MYR2.77b changed hands.
Market volatility is anticipated to rise as attention focuses on the PM’s upcoming announcement regarding the Public Service Remuneration System and the release of the 2Q24 GDP data later today.
Technically, they expected the benchmark index to range between 1,600pts and 1,620pts today, with supports at 1,581pts and 1,563pts.
CGS International (CGS) said most Asian stock markets climbed yesterday on the back of improved investor sentiment and signs of stabilisation of China’s economy.
The local benchmark FBMKLCI (KLCI), however, closed flat, up a marginal 0.59pts or 0.04% to end the day at 1,612.94.
All the sectors closed in the red except for financial services (+0.36%) and healthcare (+0.07%).
Property (-3.29%) was the largest laggard followed by technology (-1.60%) and construction (-1.53%).
Trading volume was flat at 3.57bn while trading value rose to RM2.77bn (up from RM2.51bn previously).
Market breadth turned negative again as 285 gainers lost out to 768 decliners.
The benchmark continued to inch higher, sticking to the dotted line (1,611-
1,614) from the 1,477 low yesterday.
They had previously mentioned that a close above the said line would likely move the market’s gears back to neutral.
For now, they maintained the view that the market may be ready to go into consolidation mode given yesterday’s very weak A/D ratio.
Prices are now testing the 1,611-1,614 overhead resistance with the next key resistance seen at 1,628 level.
Support is at 1,593-1,598 followed by 1,574-1,579 next.
Their portfolio remains in risk-off mode this week.
