BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI reversed its downward trajectory to close higher for the second consecutive session as mild bargain hunting emerged.
Market interest, however, was still underwhelming with the total traded volumes slipping below the 2 billion shares mark again.
Although the key index gained ground – with healthcare stocks garnering renewed buying interest, the rest of the market was mixed-to-lower with market breadth remaining negative due to the continuing weak market sentiments.
We still see market conditions staying mixed for the time being as the prevailing market impediments have not been lifted, hence could keep most market players away for longer.
However, mild bargain hunting may still sustain as Malaysian stocks could gather further headway from its oversold conditions, boosted by the positivity among key global indices that regained traction overnight.
This could help the key index to rebound further even as gains could still be measured on quick profit taking actions.
Therefore, the near-term upsides could find resistance at the 1,390 level for the time being as we see most market players resorting to trading activities instead of a buy-and-hold strategy.
Thereafter, the hurdle is at 1,394 points before the psychological 1,400 level is re-tested. On the downside, the supports are at 1,380 and 1,376 points respectively.
Malacca Securities Research
The FBM KLCI is attempting to find stability over the near term, ahead of the official announcement of the 15th General Election (GE15) date.
Meanwhile, China unexpectedly delayed the release of its 3Q 2022 GDP (gross domestic product) that is scheduled today, probably implying that the data might not meet market expectations of +3.4% year-on-year (yoy).
Back home, we reckon that the rebound on Wall Street may see buying interest spilling over on beaten down or oversold stocks over the near term.
Still, the weakening trading liquidity and persistent selling from foreign funds (net sell RM870.1 mil month-to-date) will keep bigger strides of gains at bay.
Commodities-wise, Brent crude price steadied above US$90/barrel while crude palm oil (CPO) price has inched above RM3,900/metric tonne.
The FBM KLCI recovered all its intraday losses to form a hammer candle as the key index threaded below the daily EMA9. Technical indicators stayed negative as the MACD Line is still below Signal Line while the RSI remained below 50.
Resistance is set along 1,400-1,430 while the support is envisaged along 1,355-1,365. – Oct 18, 2022
