BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities extended their downward streak at the start of the week with the FBM KLCI ending the day below the 1,420 level.
For the most part, market conditions stayed insipid on the lack of leads and many stocks were left to drift with healthcare stocks being the main losers.
Consequently, market breadth remained in the negative territory as most lower liners and broader market shares also consolidated further. Traded volumes stayed on the low side.
There is no change to the immediate market outlook as the market will remain mostly directionless with the availability of few noteworthy catalyst, both from domestic and foreign sources.
Market conditions have turned more cautious after the FBM KLCI slipped below the 1,420 level that could leave more market players guarded.
With few push and pull factors, the downside bias is likely to continue although we do not rule out an attempt to regain the 1,420 support-turn-resistance level on selective bargain hunting.
For the most part, however, the market undertone will still be one of cautiousness that is likely to see the FBM KLCI stay listless for longer.
The is an immediate support at 1,414 points which is also its recent low while further below the support is around 1,410 points. Above the 1,420 resistance, the ensuing hurdles are at 1,423-1,426 levels.
Malacca Securities Research
The FBM KLCI declined for the fifth session as profit taking activities continues ahead of the debt ceiling negotiations in the US as well as pricing uncertainty in the political scene amid the upcoming state elections.
However, Wall Street ended higher prior to the US debt ceiling talks as traders hoped that a deal would be reached in the House of Representatives.
Nevertheless, we still think the local market may stay sideways while the upside is likely to be capped on regional indices as traders may adopt a “wait- and-see” approach.
Commodities-wise, Brent crude price traded above US$75/barrel while crude palm oil (CPO) hovered below RM3,500/metric tonne. Gold price continued to stay above USD2,000/ounce.
The FBM KLCI slid for the fifth session as profit taking activities continued. Technical indicators have turned negative with the MACD Histogram fell below zero while the RSI is hovering below 50.
The support is set around 1,400-1,410 while resistance is pegged along 1,425-1,430. – May 16, 2023
