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 FBM KLCI rebounded yesterday, ending two down sessions, on the resumption of bargain hunting on selected energy and plantation heavyweights.

Property-related stocks headed higher to lead gainers and also enabled the sector to become the main Bursa Malaysia sector winner.

At the same time, conditions in the broader market remain buoyant and allowing for total gaining stocks to beat losing stocks for the day. Meanwhile, traded volumes rose by some 7.0% to over 3.6 billion shares.

Malaysian stocks could look to remain on an uptrend as it attempts to fortify its position above the 1,400 level, taking advantage of the current market strength to build up a firmer base.

With foreign funds still being net buyers coupled with the mostly positive market undertone, there should be more near-term upsides as market players continue to bargain hunt for sector leaders that were beaten down over the past few months.

We nevertheless think the near-term upsides could be modest ahead of the weekend as it could be tempered by mild bouts of profit taking.

As such, the upsides may be limited to the 1,410 level with the ensuing resistance set at 1,412 points. On the flip side, the supports remain at the psychological 1,400 level and 1,395 points respectively.

Malacca Securities Research

It appears that there were bouts of bargain hunting activities emerging on the FBM KLCI yesterday, hence we think that the key index may continue to see some nibbling to build onto its recovery trend over the near term.

Meanwhile, rotational play may continue to keep the trading interest afloat among the lower liners.

However, we are cautious that the overbought condition (both FBM Small Cap and FBM ACE) may present limited upsides.

Meanwhile, key focus remains on the on-going batch of corporate earnings in the US coupled with the retail sales data in the UK that may dictate the direction of the stock markets.

Commodities-wise, Brent crude hovered below US$80/barrel while crude palm oil (CPO) rose above RM4,000/metric tonne.

The FBM KLCI formed a bullish candle to stay above daily EMA60. Technical indicators remained positive as the MACD Histogram formed another positive bar while the RSI steadied above 50.

With the 1,400 remain sustainable in recent days, further recovery may take place towards the next resistance that is envisaged along 1,430-1,450 while the support is pegged around 1,370. – July 21, 2023

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