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

The selling on the FBM KLCI’s persisted yesterday to leave it not only at a fresh year low but also at its lowest level since October last year.

At the same time, the foreign selling escalated to leave the key index firmly on the downtrend despite the buying support from domestic institutions.

The broader market also saw continuing weakness with market breadth left in the negative territory and traded volumes also whittled down to below 3 billion units yesterday.

As noted, Bursa Malaysia’s condition remains deeply oversold but there are still few signs of a rebound as yet.

Consequently, the downtrend appears to be in play for the time being and it remains to be seen if the key index could mount an overdue rebound as yet due to the unabated foreign selling that could leave the key index to drift lower.

Even if there is a rebound, it may be mild for the time being due to the prevailing weak buying interest that is further compounded by the availability of few positive leads despite the recent gains in many overseas equity indices as domestic corporate earnings were disappointing in 1Q 2023.

The support remains at the 1,370-1,372 levels, followed by 1,365 points. The hurdles also remain at 1,380 and 1,385 points respectively.

Malacca Securities Research

The FBM KLCI slipped further into the negative territory for the second straight session.

However, as Wall Street charged higher prior to the US Federal Reserve interest rate decision next week, investors could be anticipating a less-hawkish tone by the US Fed after a cooling labour market data.

Also, we have noticed the Hang Seng Futures have turned more positive, breaking above the SMA200 zone. Such positive sentiment could spill over towards stocks on the local front and pushing the FBM KLCI higher in the near term.

Commodities-wise, Brent crude pulled back towards US$75/barrel on the back of anticipation over higher supply-demand disparity while crude palm oil (CPO) price is trading below RM3,300/metric tonne.

The FBM KLCI sank for the second consecutive session as the key index remained below its EMA200 level. Technical indicators remained negative as the MACD Histogram extended a negative bar but the RSI is oversold and may be due for a rebound.

Investors may monitor next support at 1,370 while resistance is located around 1,400-1,440. – June 9, 2023

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