Stocks head for longest rally in almost 2 years

KUALA LUMPUR: Stocks rallied today led by glove makers, with the benchmark gauge poised for its longest winning streak in almost two years.

The FTSE Bursa Malaysia KLCI Index rose 1% to 1,449.64 as of 11.37am, its seventh day of gains, sending valuations to a 10-month high. Volumes for the whole market hit a record earlier this week.

Top Glove Corp jumped almost 10%, headed for a 13th week of gains. Glove makers have surged on the back of rising demand for their products in the wake of the global pandemic.

“The KLCI is expected to exhibit strength to advance further to test 1,450 to 1,460 levels, supported by the bullish triangle breakout and positive daily and weekly technicals,” said Hong Leong Investment Bank Bhd in a report.

The market’s rally may be tested, with the stock index’s 14-day relative strength index (RSI) at 68. A RSI reading of above 70 signals sell to some traders. The short term uptrend ought to give traders further opportunities for short term trading but we remain cautious of the current upmove, CGS-CIMB Securities Sdn said in a note.

A political upheaval coupled with worries over the virus outbreak saw the FTSE Bursa Malaysia KLCI Index enter a bear market late February. Since then, the gauge is up 19% from a decade low in March, nearing the 20% gain that some of its Asian peers have already reached in order to enter a technical bull market.