Bursa Malaysia’s rally may continue, FBM KLCI seen to stay above 1,500

KUALA LUMPUR: The uptrend momentum on Bursa Malaysia is expected to continue, with traders remaining cautiously optimistic over external developments.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the brokerage firm has maintained its positive outlook, supported by attractive valuations, increase in investor confidence gauging from the higher average daily trading volume and strong foreign buying.

Nonetheless, it does not discount the possibility of profittaking activities emerging, he said.

“The key index staged a rebound and managed to surpass the stiff resistance level of 1,500 last Wednesday.

“Having posted five consecutive white candles, the index signals sustained buying interest, pointing towards the potential for additional upward movement,” he told Bernama.

Thong said a subsequent resistance level has been identified at 1,527 and surpassing this level could signify additional upward momentum.

On the flip side, the critical support level is set at 1,477, and any breach below this level would prompt a reevaluation of Rakuten Trade’s short-term bullish stance for the benchmark index, he said.

“As such, we anticipate the FTSE Bursa Malaysia KLCI (FBM KLCI) to trend between 1,495 and 1,515,” he said.

On the external front, Thong said the local market would react following the US inflation data on Friday and would closely monitor the upcoming Federal Reserve meeting to gauge the outlook for interest rate.

He said China’s Purchasing Managers Index data for January, which would also provide more cues on business activity.

For the week just ended, the local bourse was influenced by the possibility of a US rate cut, China economic stimulus as well as Bank Negara Malaysia’s (BNM) overnight policy rate (OPR) decision.

BNM’s Monetary Policy Committee (MPC) had during its first meeting of the year on Wednesday, decided to maintain the OPR at 3.00 per cent, making it the fourth pause in a row.

The FBM KLCI moved in a stable market environment, surpassing the 1,500psychological mark and recorded a five-day winning streak on Friday.

Bursa Malaysia and its subsidiaries were closed on Thursday in conjunction with Thaipusam.