What to expect on Bursa Malaysia this Friday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

While many broader market stocks and lower liners wavered, the FBM KLCI regained traction to close in on the 1,570 level.

Much of its gains emerged late in the day as foreign institutions increased their positions in banking stocks that also sent the key index to its highest level in three months.

On the flip-side, technology stocks retreated the most causing market breadth to be decidedly negative.

Meanwhile, traded volumes were largely unchanged.

The FBM KLCI has surprised on the upside of late as it continues to buck the insipid trend among its regional peers with foreign funds taking up fresh positions in which Malaysian equities have been under-owned over the past two years.

Although these moves are viewed positively, there could be a pause in the market’s uptrend following overnight weakness on many global indices that were spooked by talks of more aggressive tapering.

This could result in profit taking emerging and should see the key index ending the week on a more subdued note.

On the downside, the immediate support is at the 1,560 level and it if it breached, the 1,550 support will come into play.

The hurdles, meanwhile, are at 1,580 and 1,585 points respectively.

Malacca Securities Research

The FBM KLCI bounced from the previous day’s slide, supported by buying interest within selected industrial products and services as well as banking heavyweights.

However, we believe market sentiment on the local front will remain cautious as the rally on Wall Street faded after hitting respective intraday highs for the major indices.

Investors are still digesting and uncertain on the pace of the potential interest rate hikes in the US.

Commodities-wise, both the crude palm oil (CPO) and crude oil price saw mild a retreat but remained firm on the uptrend cycle on the back of expectations over stronger demand under the recovery environment.

The FBM KLCI rebounded and closed at intraday high, holding above the SMA200 for the third straight session.

Technical indicators remained positive as the MACD Histogram has extended a positive bar while the RSI hovered above the 50 level.

The next resistance is seen at 1,580 while the support is set at 1,530-1,540. – Jan 14, 2022

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