BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The key index was range-bound yesterday as it looks for fresh impetuses after clearing the 1,450 level in what was seen as a holding pattern.
Still, most Bursa sector indices ended the day on a positive note with energy stocks the leading lights amid a rise in oil prices.
At the same time, many lower liners and broader market shares maintained their upward bias that allowed market breadth to remain on the positive side. Traded volumes were little changed for the day.
We see the holding pattern preserving over the near term as market players assess the market’s direction following the key index’s strong up moves over the past two weeks.
At the same time, market players are also scouring for fresh impetuses as the market’s rebound from oversold conditions have largely run its course with the key index already nearing toppish levels again.
As such, further near-term gains could become more modest as valuations normalises, and the continuing cautiousness over the direction of global equities in the face of increasing headwinds.
Any near-term upsides could be capped with the near-term resistance at 1,460 points. Thereafter, the hurdle is at 1,465 points with the supports located at the psychological 1,450 and 1,440 points respectively.
Malacca Securities Research
The FBM KLCI retreated as profit-taking activities emerged amid mixed regional performances led by plantation heavyweights.
Given the mixed sentiment on Wall Street following the sell-down in tech giants in the US – coupled with the interest rate hike by the European Central Bank (ECB) – we believe the negative sentiment may spill over to the local front.
This would mean that the FBM KLCI could have limited upside potential for the near term. Commodities-wise, Brent crude price continued to climb above US$96/barrel mark while crude palm oil (CPO) price sustained above RM4,100/metric tonne.
The FBM KLCI staged a pullback but managed to sustain above its daily EMA60 level. Technical indicators remained positive but looking toppish as the MACD Histogram is forming a rounding top. However, the RSI hovered above 50.
Resistance is envisaged along 1,465-1,485 while the support is set at 1,400-1,420. – Oct 28, 2022