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 posted a mild rebound yesterday, boosted by the improved sentiments on regional equities that also renewed bargain hunting on some of the big losers a day earlier.
At the same time, Sime Darby’s proposed acquisition of UMW Holdings provided some corporate developments for the market to follow.
In the broader market, stocks also perked up that saw traded volumes rising nearly 10% from a day earlier. Market breadth also turned positive amid the improved outlook.
Market conditions are likely to stay largely indifferent over the near term that could see the key index being range-bound for the time being.
The uptrend over the past few weeks appears to have run its course after the FBM KLCI managed to regain more than 4.5% from its 1H 2023 low in June.
In the same vein, valuations have also caught up as many of the index heavyweights are already fairly valued, thus leaving little room for further upsides unless there are improvements in their fundamentals.
The ongoing results reporting have been generally discouraging, mirroring the weaker economic conditions and providing few positive leads for market players to follow.
Under the prevailing conditions, the key index could hover within a tight range between the 1,440 and 1,450 levels over the near term as it continues to build up a base around the psychological 1,450 level.
The other support and resistance levels are at the 1,437 level – the 200-day moving average line – and at 1,447 points respectively.
Malacca Securities Research
Overall, the sentiment on the local front was positive with the rebound on the FBM KLCI, FBM Small cap and FBM ACE on the back of bargain hunting activities.
However, with the Wall Street pulling back despite a stronger-than-expected Nvidia’s result, there might be spill-over of selling interest towards stocks on the local front.
Also, traders will be observing US Federal reserve chairman’s Jerome Powell’s tone during the Jackson Hole Symposium as it may provide clues for the future monetary policies which may affect the trading environment.
Commodities-wise, Brent crude steadied above US$83/barrel while crude palm oil (CPO) prices stayed above RM3,800/metric tonne..
The FBM KLCI rebounded above the SMA200 zone while the technical readings are turning mixed. The MACD Histogram extended another negative bar but the RSI has crossed above 50.
The FBM KLCI may stabilise around SMA200 and perform a rebound in the near term. Resistance is at 1,460-1,470 while support is at 1,430-1,435. – Aug 25, 2023
