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

Malaysian stocks remained on the ascend yesterday, closing higher for a second session with local and foreign institutional buyers providing the support as they continue to pick-up sector leaders to send the key index above the 1,490 level.

The upsides were also in tandem with the gains among regional bourses that were buoyed by the US Federal Reserve’s move to slow future interest rate hikes.

The lower liners also gained further ground, helping total gainers to double the number of losers for the day.

We see the key index remaining close to the 1,500 level as it attempts to close out the week on a positive note.

As it is, the market’s undertone is improving amid the calmer political environment as well as less aggressive monetary tightening prospects globally in 2023.

This could promote further nibbling on some of the sector leaders that may also herald the start of the year-end window dressing activities as valuations on Bursa Malaysia are still undemanding.

Still, we think the near-term upsides could be modest as market players await the composition of the new cabinet to be unveiled.

Therefore, the 1,500-level hurdle may still be a formidable level to clear with the interim resistance set at the 1,497 level. The supports, on the other hand, are at 1,488-1,490 levels, followed by the 1,480 level.

Malacca Securities Research

The FBM KLCI added another day of gains following the shift of tone from the Fed, turning less hawkish on its interest rate direction going forward.

However, Wall Street has pulled back mildly yesterday ahead of the jobs data that is widely watched by traders and may give a hint to the next course of action by the Fed.

As the market has turned cautious in the US, we expect Bursa Malaysia to reciprocate with trading momentum declining throughout the session.

Nevertheless, we opine that the downside risk could be limited with the uplifting of COVID-19 restrictions in selected region in China.

Commodities-wise, Brent crude price traded above US$87/barrel while crude palm oil (CPO) price hovered around RM4,100/metric tonne.

The FBM KLCI rebounded and could have formed a flag pattern breakout yesterday. Technical indicators are suggesting that the positive momentum is intact with the MACD Histogram added another positive bar while the RSI is above 50.

Resistance is at 1,500-1,510 while the support is pegged along 1,450-1,460. – Dec 2, 2022

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