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Bursa Malaysia has moved lower in back-to-back sessions, sinking more than 10 points or 0.6 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,545-point plateau although it may stop the bleeding on Friday.
RHB Retail Research in a note today (Feb 23) said the FKLI underwent a bearish session yesterday, declining 6 pts and closing lower at 1,548.50 pts.
The index initially opened at 1,556 pts and rose to the day’s high of 1,560 pts.
However, strong selling pressure dragged it to the day’s low at 1,546.50 pts and closed at 1,548.50 pts.
The latest session saw the index’s upside movement capped at the 1,560-pt resistance.
The index is expected to undergo a consolidation below the 1,560 pts and may pullback towards the 1,515-pt support.
The consolidation should persist until the index manges to break past the 1,560-pt resistance and resume the upward movement.
During this consolidation phase, MSSB retain the bullish bias.
Traders should hold on to the long positions initiated at 1,455 pts, or the close of 3 Nov 2023. To manage the trading risks, the stop-loss is placed at 1,450 pts.
The first support remains unchanged at 1,515 pts, followed by the 1,500-pt mark.
Meanwhile, the immediate resistance is revised to 1,560 pts, followed by the 1,600-pt level.
Malacca Securities (MSSB) said the FBMKLCI (-0.45%) ended lower, despite the positive performance in the regional stock markets, dragged by Utilities heavyweights.
On the broader market, the Technology sector (+3.13%) was the leading sector, while the Utilities sector (-0.96%) declined.
The Day Ahead
The FBMKLCI pulled back for the second session consecutively prior to release of YTLs’ results. Over in the US, Wall Street charged higher as the sentiment turned bullish after the strong set of results from Nvidia; the Dow and S&P500 closes at record highs.
Meanwhile, the flash US manufacturing PMI rose to 17-month high of 51.5 (consensus: 50.5), while the S&P flash US services PMI dipped to a 3-month low of 51.3 (consensus: 52.4); both in the expansion territory.
On the commodity market, the Brent oil price still holding above USD83/bbl amid ongoing conflicts in the Middle East, coupled with the US inventories rising less-than-expected.
Sectors focus: With the positive sentiment observed in the US following Nvidia’s results, we believe the buying interest may extend following yesterday’s momentum in the Technology sector on the local front.
Meanwhile, the FBMKLCI’s upside may be capped by the flattish YTLPOWR’s results.
Other notable result includes PWRWELL, where the earnings have increase strongly due to some data center and solar-related projects.
Besides, MSM saw a turnaround on a QoQ basis, but it might have been reflected in the share price, thus the market may perform a sell-on-news strategy.
Bloomberg FBMKLCI Technical Outlook
The FBMKLCI dropped for the 2nd consecutive day. However, the technical readings on the key index were positive, with the MACD Histogram extending another positive bar, while the RSI maintains above the 50 level.
The resistance is envisaged around 1,560-1,570 and the support is set at 1,520-1,530.
