BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index continues to retreat but remained near the psychological 1,500 level amid a still directionless trading environment.
The FBM KLCI’s indifference was also a contrast to the region’s mostly upbeat performance, but the lower liners and broader market shares continue to gain headway with retail players making a beeline into equities.
As a result, traded volumes climbed nearly a third from the prior day while market breadth was also decidedly positive.
While most global equity indices found fresh upside momentum, the FBM KLCI is still dithering, unable to find sufficient traction to move higher with the lack of catalysts and valuations that are seen as fair relative to its regional peers.
As a result, the buying interest on the key index constituents are likely to stay anaemic. Their performance may remain decoupled from the global peers that would also leave the sideway trend intact for the time being.
It also means that the psychological 1,500 level will remain a substantial hurdle to clear convincingly unless there is renewed buying interest. In the meantime, the supports stay at 1,495 and 1,490 points respectively while the other hurdle is at 1,505 points.
Malacca Securities Research
Despite the weakness as of late, we expect the key index to re-test the 1,500 level, taking cue from the positive sentiment on Wall Street overnight.
The lower liners are staying firm amid strong buying interest but we caution that the overbought position in most of the stocks across Bursa Malaysia may attract quick profit taking over the foreseeable future.
Globally, the stronger-than-expected economic data in the US may continue to lend support for further recovery on Wall Street.
Commodities-wise, Brent crude recovered all its previous session losses to close above USD87/barrel on the back of larger-than-expected drawdown in natural gas inventory while crude palm oil (CPO) price ticked slightly higher to approach RM3,800/metric tonne.
The FBM KLCI continues to linger sideways with 1,500 remain in focus. Technical indicators stayed positive as the MACD Histogram remained above zero while the RSI hovered above 50.
Should 1,500 be re-tested again, the next resistances are envisaged around 1,525-1,540 while the supports are located at 1,450-1,460. – Jan 27, 2023
