Bursa Malaysia has moved higher in two of three trading days since the end of the seven-day losing streak in which it had slumped more than 25 points or 1.5 percent.
The Kuala Lumpur Composite Index now sits just above the 1,590-point plateau although it’s likely to hand back those gains on Monday.
RHB Retail Research (RHB) in a note today (July 1) said the FKLI staged a strong rebound in the last trading session of June, climbing 14.50 pts to close at 1,596.50 pts.
On Friday, the index began trading at 1,581.50 pts.
It climbed to the 1,598 pts intraday high and closed at 1,596.50 pts – charting a bullish candlestick.
However, as it has yet to cross above the 50-day SMA line, the bears still have the technical advantage.
Should the positive price action follow through for the immediate sessions, the index may face strong selling pressure at the 1,600-pt level.
Rising above this psychological resistance will improve the technical setup.
A higher resistance at the 1,622-pt level will block the FKLI’s upside movement.
Although the index shows early sign of bullishness, they still hold on to the negative trading bias until it manages to cross above the 1,622 pts resistance.
They advised traders to retain the short positions initiated at the close of 19 Jun or 1,597 pts.
To mitigate the trading risks, the initial stop-loss threshold is set at 1,622 pts.
The immediate support locates at 1,575 pts, followed by the 1,550-pt mark.
On the upside, the immediate resistance is pegged at 1,600 pts, followed by 1,622 pts or the close of 4 June.
Malacca Securities (MSSB) said the FBM KLCI (+0.32%) ended higher as the index was lifted by buying pressure in the Telco & Media and Utilities heavyweights as investors could be expecting softer US inflation data and could push the Fed for earlier rate cuts this year.
Also, the quarter end window dressing may help lifted the sentiment.
The Day Ahead
Stocks on the Bursa exchange ended the final trading day of 1H2024 on a positive note, lifted by selected Telco companies like CDB and Maxis.
Wall Street closed lower despite reports suggesting consumer spending rose moderately in May.
Meanwhile, traders will be watching for the release of several key economic data points, including the ISM manufacturing PMI and jobs data like non-farm employment and the unemployment rate.
On the commodity front, Brent oil ranged between USD84-85 as the EIA’s report suggested rising inventories.
The gold price and CPO traded flat within the USD2320-2330 range and RM3900-4000, respectively.
Sectors focus: Despite the selling pressure on Wall Street, they believed buying support should continue on the local front.
They saw opportunities within the Technology sector, where rising investments and demand for data center, AI, and cloud services should support trading activities for now.
Additionally, they recommended selected sectors like Shipping, Renewable Energy, Building Materials, Packaging, and Consumer for short-term trading opportunities.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended higher towards the 1,590 level.
The technical readings on the key index were negative with the MACD Histogram forming a negative bar, while the RSI is below 50.
The resistance is envisaged around 1,605-1,610 and the support is set at 1,570-1,575.
