BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Heavy profit taking emerged yesterday as market conditions deteriorated on concerns over China’s flagging property market conditions.
In the process, the FBM KLCI surrendered much of its recent gains as it slipped below the psychological 1,450 level as well.
The selling also extended to the broader market, breaking their recent upward streak and leaving market breadth decidedly negative.
The heavy profit taking also saw a spike in traded volumes to 4.3 billion units, some 20% higher than the day before.
After an extended overbought streak since the start of 2H 2023, market conditions are turning choppier, spooked by China’s economic woes that could have a negative bearing on regional economies.
Also, the recent pullback in key global indices could cause market conditions to be cautious again and leave the FBM KLCI vulnerable to further consolidation, particularly after yesterday’s steep fall as more market players may opt to lock-in their profits from the recent rally that has left valuations slightly stretched.
Therefore, the market could still waver ahead of the release of the country’s 2Q 2023 GDP (gross domestic product) data later today with the consensus forecast pointing to a growth of 3.6% year-on-year (yoy).
On the downside, the supports are now at 1,440-1,443 levels, followed by the 200-day moving average line of 1,437 points. The resistances, on the other hand, are at the psychological 1,450 points, followed by 1,455 points.
Malacca Securities Research
Volatility took precedence with the key index wiping out all the previous two sessions of gains yesterday.
Sentiment was roiled by the weakness on Wall Street overnight while foreign funds have turned net selling mode for the first time in nine trading sessions.
The lower liners were not spared as profit taking activities emerged following the recent winning run.
Looking ahead, investors will be keeping an eye on the key economic data, notably Malaysia’s 2Q 2023 GDP data set to be released today.
We believe the market may cheer should the reported number comes at above the Bloomberg consensus expectations of 3.6% yoy growth.
Commodities-wise, Brent crude is being supported above US$83/barrel while crude palm oil (CPO) prices hovered above RM3,800/metric tonne.
The FBM KLCI ended lower and formed a bearish candle and the key index slipped below the daily EMA9 level yesterday. Technical indicators turned mixed as the MACD Histogram formed a negative bar while the RSI is treading above 50.
The next resistances are located along 1,480-1,500 while the support is pegged around 1,420-1,440. – Aug 18, 2023
