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

After testing the 1,600 level, the FBM KLCI retreated yesterday, ending its seven-day winning streak as the slightly overbought market conditions prompted profit taking.

Recent big movers in the plantation, construction, financial and telecommunication sec tors retreated.

While the big caps dithered, many lower liners and broader market shares were stable even as market breadth turned negative. Meanwhile, traded volumes continue to ease as fresh buying interest waned.

After its mild retreat yesterday, the key index still appears slightly overbought. However, we think that the pullback will be short-lived as the market’s undertone is still upbeat that could provide the impetus for a quick recovery.

This may allow the key index to end the week on a sanguine note that is also aided by the positive performance of key overseas bourses overnight.

Nevertheless, the 1,600 level may still be a formidable level to break with valuations already fair which leaves little room for significant upsides.

As such, the upsides may be more modest as there will be still some selling into strength actions that could limit the gains.

Above the 1,600 resistance, the other hurdles are at the 1,608 and 1,620 levels. The supports, meanwhile, are at 1,590 and 1,580 points respectively.

Malacca Securities Research

The FBM KLCI took a breather following a seven-day winning streak as the key index retreated from the 1,600 psychological level on the back of profit taking activities.

However, tracking the strong gains from Wall Street overnight, we expect local equities to gain momentum with investors focusing on the upcoming Budget 2022 beneficiaries. We anticipate some goodies to be revealed for the construction, telecommunication, and solar sectors.

Commodities-wise, crude palm oil (CPO) price declined after a surge in the previous session while crude oil price rebounded above the US$84/barrel mark.

The FBM KLCI pulled back from the 1,600 psychological but still hovering firmly above the SMA200 level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI is slightly below the 70 level.

The resistance is pegged along 1,605-1,620 while the support is located around 1,580 followed by 1,550. – Oct 15, 2021

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