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 made a strong comeback on Monday amid fresh buying interest from foreign funds on some of the beaten down index-linked stocks to start a rebound from its mildly oversold conditions.
This also helped most Bursa sector indices to mount a recovery with technology stocks making the most headway.
Although the recovery lifted the key index past the 1,610 level again, the overall conditions were still tentative as gainers just nudged ahead of losers with volumes also tapering further.
Yesterday’s rebound was welcomed to break the FBM KLCI’s string of losses that could also hasten a recovery trend as it continues to adjust from its bout of oversold.
However, there are still few near-term impetuses and this could see overall conditions remaining directionless with the wait-and-see stance likely to dominate sentiments for longer.
This could also slow the follow-through buying interest and consequently further gains may become more modest, particularly after the strong gains yesterday that may even prompt some quick profit taking actions and follow-through buying interest is still thin.
Consequently, the 1,620 level is now the immediate resistance, followed by the 1,625 level. The supports, on the other hand, are set at 1,605 points with the psychological 1,600 level the ensuing support.
Malacca Securities Research
The FBM KLCI managed to rebound on top of the 1,600 level after the MSCI re-balancing activities last week.
We believe the overall buying interest could sustain as traders and investors could be reassessing the corporate earnings and positioning for trading opportunities in 2H 2024.
Meanwhile, the US stock markets traded higher after job openings data came in weaker-than-expectation for that may lead to earlier interest rate cuts by the US Federal Reserve.
On the commodity markets, Brent crude further declined below US$78/barrel as the US data signals a cooling economy environment. Meanwhile, CPO (crude palm oil) violated below RM4,000, pricing in weakness in Dalian contracts and softer crude oil prices weighing on the CPO market.
The FBM KLCI index rebounded to the 1,615 level, breaking the previous resistance. The technical readings on the key index were mixed with the MACD Histogram extending another negative bar while the RSI climbed above 50.
The resistance is envisaged around 1,630-1,635 while the support is set at 1,595-1,600. – June 5, 2024
