KUALA LUMPUR: Bursa Malaysia Construction Index (KLCON Index) is poised for a rebound today with construction stocks set to benefit from the positive spill-over, said Maybank Investment Bank.
The research house said the index is consolidating in a bullish flag pattern.
“To validate our bullish view, KLCON Index will need to swing past the 30- day simple moving average (SMA) which is currently at 328.74. Once this level is taken out, we expect another rally towards its multi-year high of 344.91 again,” it said in a note.
Although technical outlook seems to favour the bear at this juncture, with the index still trading below its 30-day and 50-day (SMAs), Maybank IB believes a low is formed, which is likely the turning point.
While technical indicators have yet to show strong buying signals, the bullish divergence on RSI indicator suggests that selling pressure has tapered off, it added.