Technical rebound faces resistance at 1,580-1,600-1,613 levels amid lingering trade tensions and upcoming Feb results season

Technical Stkpick: MNHLDG

KLCI: 1564.56 (10.9)
DOW: 44556.04 (134.1)
MSCI Asia: 182.61 (2.7)
FCPO (RM): 4328 (20)
BRENT (USD): 76.2 (0.24)
USDMYR: 4.4447 (-0.031)
SGDMYR: 3.2771 (0.004)
EURMYR: 4.5952 (0.017)
AUDMYR: 2.7584 (0.011)
GBPMYR: 5.5215 (0.023)
US: 10-yr yield (%) 4.5105 (-0.044)
BNM:10-yr yield (%) 3.79 (-0.002)

Asia/US. Asian markets mostly soared in early trades amid optimism for a trade breakthrough after Trump postponed tariffs on Canada and Mexico for a month. However, the gains were tempered as concerns remained on looming Trump’s tariffs against the EU and China’s retaliation with 10-15% levies effective Feb 10 on US goods. The Dow rose 134 pts to 44,555 as investors navigated the latest developments in global trade tensions and a deluge of corporate earnings, coupled with a slew of soft economic data from US economic optimism index, job openings and factory orders. On earnings front, AMD fell 8% after hours amid weak forecast while GOOG plunged 8% as revenue growth slowed. For the rest of the week, attention will turn to ISM services and NF payrolls data, as well as major earnings results due from AMZN, MRK, QCOM, DIS and HON

Malaysia. Tracking higher regional markets and easing foreign net outflows, KLCI jumped 10.9 pts at 1,564.5 as sentiment was boosted by gains in construction, banking and telco stocks. Market breadth rebounded to 1.31 vs 0.65 previously while trading volume rose 7% to 2.23bn shares valued at RM2.05bn. Foreign net outflows continued for the 22nd day but moderated to RM18m (Feb:-RM170m, Jan: -RM3.13bn, YTD25: -RM3.3bn) alongside local institutions (-RM10m, Feb: +RM121m, Jan: +RM1.92bn, YTD25: +RM2.04bn) while local retailers (+RM28m, Feb: +RM49m, Jan: +RM1.21bn, YTD25: +RM1.26bn) emerged as major net buyers.

Technical view KLCI’s downtrend may persist, with major support pegged at 1,545 (Jan 17 low) and 1,529 (Aug 6 low) levels, unless it could stage a successful breakout above the upper trendline near 1,580. A confirmed breakout will lift the index towards the 1,600 and 1,613 (200D MA) zones.

Despite ongoing oversold rebound, KLCI may continue to face choppy waters ahead (support: 1,530-1,545; resistance: 1,580-1,600-1,613) as we brace for: (i) global trade tensions following US tariffs; (ii) China’s economic challenges; (iii) lingering headwinds from the AI and DCs; and (iv) persistent foreign funds outflow. 

Technically, MNHLDG (CP: 1.04, BUY, TP: RM1.60) is poised for further recovery, having established a base above the support trendline, coupled with positive technical indicators. A confirmed breakout above RM1.10 (50D MA) could propel the stock towards RM1.16 (61.8% FR) and RM1.22 (76.4% FR) zones. Meanwhile, major support levels are seen at RM0.98 (UTL support) and RM0.93 (200D M).

Source: Hong Leong Investment Bank Research - 5 Feb 2025