Bursa Malaysia has moved higher in two straight sessions, gathering almost 15 points or 1 percent along the way.
The Kuala Lumpur Composite Index now sits just beneath the 1,600-point plateau and it's expected to open in the green again on Tuesday.
RHB Retail Research (RHB) in a note today (July 2) said the FKLI managed to climb above the 1,600 pts resistance yesterday to close higher at 1,602 pts.
The index started off July's first trading session at 1,594.50 pts.
After setting its foothold at the 1,590.50 pts day's low, it rose to the 1,602 pts day's high before the close.
The latest session saw the index closing at the day's high, suggesting the market sentiment has improved.
The RSI is rounding upwards now, echoing price action should follow through for the coming sessions.
Riding on the renewed momentum, the bulls are setting its sights to test the 1,622 pts resistance.
Breaching the 1,622-pt level would confirm a bullish setup.
Before that happens, they retained the negative trading bias.
Traders should hold on the short positions initiated at the close of 19 Jun or 1,597 pts.
To manage the trading risks, the initial stop-loss threshold is placed at 1,622 pts.
The immediate support remains unchanged at 1,575 pts, followed by the 1,550-pt mark.
The immediate resistance is revised to 1,622 pts – 4 Jun's close – and followed by 1,637 pts (20 May's high).
Malacca Securities (MSSB) said the FBM KLCI (+0.51%) ended higher as the index was lifted by buying pressure in the Utilities heavyweights, namely YTL and TENAGA as the ongoing AI and data centre themes are still the main driver.
The Utilities sector (+2.30%) was the best performing sector.
The Day Ahead
The sentiment on the local front started the 1H2024 on an upbeat tone, with overall indices ending in the positive territory, except for the Telco and Media sector.
Meanwhile, most of the tech giants in the US have rebounded despite ISM manufacturing PMI coming in below expectations.
Going forward, investors will be monitoring (i) remarks from the Fed's Chair Jerome Powell later today, (ii) the FOMC meeting minutes on Wednesday, and (iii) the US non-farm payrolls data due on Friday.
At this juncture, the Fed is projected for one rate cut in 2024.
On the commodity front, Brent oil experienced a short consolidation breakout charging above USD86, while the gold price rangebound along USD2330.
For the CPO, it has started to climb above RM4,000.
Sectors focus: Given the positive overnight Wall Street movements, we believe the buying support should continue on the local front within the Technology sector, supported by the data center, AI, and cloud services catalysts.
Meanwhile, the sudden surge in commodities could provide healthy trading activities within the Energy, and Plantation sectors at least for the near term.
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 1,598 level.
The technical readings on the key index were, however negative with the MACD Histogram still in the negative region.
Nevertheless, the RSI crossed above 50.
The resistance is envisaged around 1,613-1,618 and the support is set at 1,578-1,583.