KUALA LUMPUR: A rebound on Bursa Malaysia is poised to pick up steam in the coming week after the bourse descended into oversold conditions.
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At the opening bell, the benchmark FBM KLCI rose 1.53 points to 1,377.61, extending the slight rebound seen in the previous Friday session.
According to Kenanga Research, the key index will be continuing from where it left off as it attempts to find a stable footing following its 4.3% retracement from a recent high of 1,438 on May 8.
“On the chart, as both the stochastic and RSI indicators are poised to unwind from the oversold position, the bellwether could bounce off from a descending trendline (that stretches back to November last year) to plot a double-bottom reversal pattern (which broadly coincides with its preceding trough of 1,373 that was hit in mid-October last year),” it said in its weekly technical review.
Kenanga expects the ongoing selling pressure to eventually ease off to pave the way for a technical rebound.
“Our first support threshold for the FBM KLCI presently stays at 1,355 (S1). On the upside, the benchmark index’s immediate resistance hurdle is seen at 1,395,” it added.
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On global developments, the research for said the US consumer price index report for May tomorrow will provide an update on the latest inflationary situations.
The data will sway the decision of US Federal Reserve officials meeting on Tuesday and Wednesday over whether to raise or leave the federal fund rate unchanged.
On Malaysia’s blue-chip index, banks led the rally as Public Bank rose three sen to RM3.85, CIMB gained five sen to RM5 and Hong Leong Bank climbed 18 sen to RM18.84.
Tenaga Nasional was also up four sen to RM9.22 while PETRONAS Chemicals gained two sen to RM6.42.
Most active on the market were Classita rising two sen to 14.5 sen, MQ Technology dropping 0.5 sen to three sen and Tanco unchanged at 49.5 sen.
– The Star