Bursa Malaysia has finished higher in two straight sessions, collecting more than 15 points or 1 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,650-point plateau and it’s likely to be rangebound again on Wednesday.
At 9.15am, the FBMKLCI rose +5.48 points to open at 1,657.77.
RHB Retail Research (RHB) in a note today (Aug 28) said the FKLI resumed the upside movement in Tuesday’s session, rising 7.5 pts to close higher at 1,654 pts.
Yesterday, the index opened at 1,645.50 pts.
It climbed to touch the 1,659.50 pts intraday high before the close.
According to RHB, the latest bullish candlestick, coupled with the rising RSI, suggest the bullish momentum is gaining traction now.
It is likely that the positive price action will follow through for the coming sessions, testing the 1,670 pts resistance.
Breaching the immediate resistance would open the door for further movement towards the 1,700-pt level.
They observed the 50-day SMA line is rounding upwards now, enhancing the current bullish technical setup.
Since the bullish momentum is in play now, they will stay with the positive trading bias.
Malacca Securities (MSSB) said the FBM KLCI (+0.81%) closed higher, boosted by buying pressure in banking heavyweights such as PBBANK (+17.0 sen) and MAYBANK (+16.0 sen), after PBBANK’s strong earnings report and an upgrade for Malaysia by Nomura.
Meanwhile, the Telco and Media sector was the leading sector for the session.
The Day Ahead
The trading tone on the local front was mixed, with traders focusing on blue-chip stocks while avoiding small caps and lower liners.
In the US, Wall Street ended slightly higher as consumer sentiment continued to improve in August, rising to 103.3 from 101.9 in July.
However, gains were limited as investors remained cautious ahead of Nvidia’s earnings report.
This week, investors will closely monitor key economic data, including (i) preliminary US GDP (Thu), (ii) unemployment claims (Thu), and (iii) core PCE data (Fri).
In the commodity market, Brent oil declined by more than 2.3%, despite ongoing Middle East tensions and concerns over the oil fields shutdown in Libya.
Gold prices remained above USD2,500, supported by expectations of an interest rate downcycle going forward, while CPO prices closed
above RM3,900, driven by Indonesia’s plans for biodiesel policies.
Sector Focus: Despite the positive trading sentiment in the US, they believed local investors will focus on the ringgit’s strength and earnings releases from INARI to gauge trading activity in the technology sector.
The stronger ringgit environment is expected to benefit the Consumer, Construction, Banking, and Building Material sectors.
Additionally, they anticipated bargain hunting in O&G stocks following the strong earnings releases.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended higher towards the 1,652 level.
However, the technical readings on the key index were with the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,667-1,672 and the support is set at 1,632-1,637.
CGS International (CGS) said Asian stock markets finished mixed on Tuesday with the local benchmark FBMKLCI (KLCI) being the best performing index in the region.
The KLCI soared 13.33pts or 0.81% to end the day at 1,652.29.
The biggest gains came from telecommunications (+1.56%), financial services (+1.25%) and energy (+1.22%).
Technology (-1.65%), REIT (-0.60%) and transportation (-0.47%) were the top laggards.
Trading volume increased to 3.19bn (up from 2.83bn previously) while trading value improved to RM3.20bn (up from RM2.62bn previously).
Market breadth stayed negative for six days in a row as 476 gainers dragged by 640 decliners.
The benchmark closed at its 44-month high yesterday (on a close basis) with a white bullish candle.
The pennant-like breakout suggests that the base-building phase is likely completed and more upside may follow next.
Overhead resistance is seen at 1,660 and the larger uptrend is likely to resume if the said level is taken out.
1,680 is the next resistance.
The 1,632-1,638 (May-July highs) acts as support for now.
They will turn short-term bearish if the KLCI closed below the 1,614-1,624 support.
Their portfolio stays in risk-on mode this week.
