KUALA LUMPUR: Defying profit-taking pressures, the domestic market continued its rally on the final day of the second quarter earnings season.

At 9.11am, the FBM KLCI was on track for a seventh straight day of gains, rising 11.09 points to 1,601.10 to tentatively cross the 1,600 psychological resistance.

"Technically speaking, following the faster-than-anticipated rebound last week, the FBMKLCI could be digesting its recent gains first amid profit-taking temptations.

"Still, given the improved market sentiment, the existence of renewed buying interest is expected to provide support for the market bellwether in the near term," said Kenanga Research in its weekly technical outlook.

From a technical perspective, barring a convincing breach of the 200-day simple moving average, the research house expects the index to oscillate with a marginal downside bias between 1,550 and 1,600.

Notably, the FBM KLCI has recorded negative monthly returns in September in eight of the last 10 years with an average monthly return of minus-1% since 2011.

"We have tweaked our support and resistance levels to 1,550 (S1) / 1,510 (S2) and 1,600 (R1) / 1,645 (R2), respectively," said Kenanga.

With regards to trading strategy, Kenanga expects investors to swtich their focus to rotational plays given the 4.8% advance in the FBM KLCI over the week and laggards in the mid- and small-caps space judging by the slower rise in the FBM70 index, Small Cap Index, Fledgling Index and ACE Index.

Meanwhile, bank stocks remains buoyed by their recent earnings performances and positive outlook.

Maybank was up six sen to RM8.43 while Public Bank stayed flat at RM4.18.

CIMB, which is expected to release its earnings later today, rose three sen to RM4.92 while Hong Leong Bank, also awaiting results, climbed 12 sen to RM19.12.

IHH Healthcare continued its bullish momentum, jumping 10 sen to RM6.45, and MISC gained 18 sen to MR7.18.

Petronas Chemicals was up 13 sen to RM8.33.

Meanwhile, top actives on Bursa Malaysia were KNM up 0.5 sne to 26.5 sen, Green Ocean gaining 0.5 sen to 3.5 sen and Orion down 1.5 sen ot four sen.