Profit-Taking Breather as Overbought Momentum Check Gains

Bursa Malaysia shares rose on Monday, with bargain hunting in utility, healthcare, construction and technology heavyweights lifting the blue-chip benchmark to another fresh near two-year high. The FBM KLCI climbed 7.5 points to close at 1,582.66, off an opening low of 1,575 and high of 1,583.34, as gainers led losers 668 to 438 on robust trade totalling 4.24bn shares worth RM3.48bn.

Resistance at 1,600/1,620; Supports at 1,551/1,542

Stocks should pause for profit-taking breather after recent strength given the short-term overbought technical momentum, which should check gains. Immediate resistance for the index is revised higher to 1,600, with stronger upside hurdles seen at 1,620 and then 1,640. Key supports will be at 1,551, 1,542 and 1,520, the respective rising 30-day, 50-day and 100- day moving averages.

Bargain MRCB & UEM Sunrise

A confirmed breakout on MRCB share price above the upper Bollinger band (70sen) should accelerate gain towards the 200%FP (74sen) and 223.6%FP (79sen) ahead, with profit-taking pullbacks seen cushioned by the 150%FP (63sen) and 138.2%FP (60sen). UEM Sunrise will need breakout above the 123.6%FP (RM1.11) to enhance upside momentum towards the 138.2%FP (RM1.21) and 150%FR (RM1.30) going forward, while the rising 100-day ma (98sen) provide strong uptrend support.

Asian Markets Gain as the Japanese Yen Surge After Hitting 160

Asian stocks largely climbed on Monday as the Japanese yen strengthened after hitting 160 against the U.S. dollar. The yen surged about 2% to trade around 155 after weakening to 160.03 earlier in the session. On Friday, the Bank of Japan left interest rates unchanged. Japan’s stock markets are closed for a public holiday. Traders look toward the Federal Reserve’s meeting this week, following another hotter-than-expected U.S. inflation reading Friday. In Asia, China’s official purchasing managers index for April is expected Tuesday ahead of the Labor Day holiday on Wednesday, along with Japan’s industrial production and retail sales data from March.

Australia’s S&P/ASX 200 closed up 0.81% at 7,637.40, rebounding from Friday’s losses. South Korea’s Kospi rose 1.17% to end at 2,687.44, and the small-cap Kosdaq gained 1.51% to close at 869.72. Hong Kong’s Hang Seng index rose 0.54%, while China’s CSI 300 added 1.11% to close at 3,623.91, hitting its highest level since Nov. 6, 2023.

Wall Street Ends Higher Lifted by Tesla

US stocks ended higher overnight, lifted by Tesla, while traders geared up for a week dominated by corporate earnings and a Federal Reserve meeting. The S&P 500 rose 0.32% to 5,116.17, while the Nasdaq Composite added 0.35% to 15,983.08. The Dow Jones Industrial Average added 146.43 points, or 0.38%, to end at 38,386.09. Tesla jumped more than 15%, providing upward momentum to the market after clearing a key hurdle for full self-driving technology in China. Apple climbed around 2.5% on the heels of a bullish upgrade from investment firm Bernstein. However, those gains were somewhat mitigated as Big Tech peers Microsoft, Alphabet and Meta all finished lower.

Domino’s Pizza popped more than 5% after reporting earnings that topped expectations. Apple, McDonald’s, Coca-Cola and Amazon are also among the major companies sharing quarterly financials this week. Those releases come during what is shaping up to be a strong earnings season. Of the more than 46% S&P 500-listed firms that have posted results so far, about 4 out of every 5 have surpassed expectations, according to FactSet. Monetary policy will be the focus later this week, with the Fed set to release its latest interest rate announcement on Wednesday. While the central bank is widely expected to keep the borrowing cost unchanged, investors will still closely monitor the post announcement press conference with Chairman Jerome Powell.

Source: TA Research - 30 Apr 2024