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

Profit taking which set in towards the end of yesterday’s session has resulted in the key index registering its first loss in five days.

It also saw the key index failing to take out the psychological 1,400 level after making attempts earlier in the day.

Although market conditions turned mixed, market breadth was still positive as many broader market shares rose with technology stocks the day’s big mover. Traded volumes and value were marginally higher than the previous day.

Despite the slight pullback yesterday, the near-term market outlook remains mildly positive, aided by the still upbeat global equity market performance that is expecting the monetary tightening exercises to slow following the easing inflation readings.

In addition, foreign funds have seemingly ended their selling for now and have turned net buyers in what is seen as bargain hunting on selected index-linked stocks due to their more compelling valuations after their steep falls in 1H 2023.

This could still allow the key index to mount a quick comeback and re-test the 1,400 level again. However, the level may prove to be a formidable level to penetrate and the upsides may be measured.

If the level is cleared, however, the next hurdles are at 1,406 and 1,411 points respectively. The supports, on the other hand, are at 1,395 and 1,390 points.

Malacca Securities Research

Signs of quick profit taking activities emerged within the local bourse as the key index was not able to climb and close above the 1,400 psychological level.

We expect further recovery to be in store as foreign funds have turned into a net buying position over the past two days.

On the other hand, lower liners may continue to build onto their recovery momentum, taking advantage of the positive market sentiment.

With inflationary pressure cooling off in the US, upward movements could sustain over the near term. Commodities-wise, Brent crude climbed above US$81/barrel while crude palm oil (CPO) steadied above RM3,800/metric tonne.

The FBM KLCI formed a bearish candle, reversing all its intraday gains yesterday. Technical indicators, however, remained positive as the MACD Histogram formed another positive bar while the RSI remained above 50.

The next resistance will be set along 1,413-1,430 while the support is pegged around 1,370. – July 14, 2023

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