BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was more weakness on Bursa Malaysia as the FBM KLCI slipped below the psychological 1,600 level to its lowest level in two weeks amid an increase in profit taking activities.
Much of the losses emerged towards the end of the day with selling being relatively heavy as it extended to the broader market.
As a result, total losers overwhelmed gainers by a wide margin of nearly on a 3-to-1 ratio. The FBM ACE and Small Cap indices both shed about 1.0% for the day.
Market conditions have become unsettled again with the incessant profit taking actions that have left the key index below its major support of 1,600 points.
A breach of the level may prompt further selling as conditions could turn more precarious due to the lack of fresh leads.
For now, the key index is left at the crossroads although buying support could emerge to lift the key index back above the 1,600 level that would preserve its range-bound trend.
Still, any rebound may be mild at this juncture due to the availability of few noteworthy leads to sustain a recovery.
Therefore, we see the key index still largely on a drifting trend for the time being due to the thinner fresh buying interest.
Below the 1,600 level, the supports are now at 1,595 and 1,590 points respectively. Above the immediate resistance of 1,600 points, the ensuing resistance is at 1,605 points
Malacca Securities Research
The Malaysia market continues to see further profit taking activities with the FBM KLCI having dipped slightly below the 1,600 level.
Meanwhile, the US markets were closed for the Juneteenth public holiday while the European markets ended mostly lower.
We believe traders will be monitoring a few key events such as (i) unemployment claims; and (ii) the flash manufacturing and services PMI (Purchasing Managers’ Index)..
On our local front, we believe that market sentiment may turn softer after a strong rally in the past two months, translating to a consolidation mode on the Bursa exchange.
On the commodity markets, Brent crude may trend above the consolidation zone of US$81-US$84/barrel while gold has stabilised around US$2,330/oz. The CPO (crude palm oil) is still positively biased in its trading movements and may range around RM3,900-RM4,000/metric tonne.
The FBM KLCI index ended lower by dipping below the 1,600 level. The technical readings on the key index were negative with the MACD Histogram forming another negative bar while the RSI drops below 50.
The resistance is envisaged around 1,615-1,620 while the support is set at 1,580-1,585. – June 20, 2024
