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 inched higher yesterday with mild bargain hunting on selected index heavyweights which allowed the key index to extend its recovery streak.
For the most part, however, market conditions were mixed with healthcare stocks emerging as the biggest winner.
The mixed conditions also resulted in market breadth marginally on the negative side as many broader market shares are still seeing low following which the total traded volume was just modestly higher than the previous day.
With the key index regaining some traction, it would be looking to build upon the gains it attained over the past two sessions to extend its upward streak.
However, the upsides could still be relatively benign due to the continuing low market interest.
There is also a dearth of noteworthy domestic leads with market players awaiting for more corporate results to be released over the coming weeks to gauge the prospects of Malaysian companies over the coming quarters.
As such, the key index could only be targeting the 1,425-1,428 levels over the near term that could also help it to fortify its base building efforts. Beyond the above levels, the ensuing resistance is at 1,430 points while the immediate support is the 1,420 level, followed by 1,417 points.
Malacca Securities Research
The FBM KLCI gained marginally higher for the session, led by Petronas Dagangan Bhd and Nestle (M) Bhd.
Although the deal for the US debt ceiling is not reached, the market could be speculating a positive outcome before this weekend on the ongoing debt ceiling negotiations. This has somehow contributed to the strong performance on Wall Street with the market seen reducing it exposure on gold.
However, on our local front, the state elections coupled with the on-going earnings season could cap the upside potential at least for the near term.
Commodities-wise, Brent crude price surged above US$75/barrel while crude palm oil (CPO) is traded below RM3,500/metric tonne while gold price fell below US$2,000/ounce.
The FBM KLCI rebounded for another session but the technical indicators are suggesting that the upside could be capped in the near term. The MACD Histogram has extended another negative histogram while the RSI is below 50.
Resistance will be located around 1,440-1,450 while the support is at 1,400-1,410. – May 18, 2023
