BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Selected buying interest continues to lift the FBM KLCI to a positive close at the end of last week and to extend its uptrend.
For the most part, however, market conditions were relatively subdued due to consolidation among key global equity indices after their recent run-up.
The insipid trend was very much reflected among the lower liners as they were on the backfoot for most of the day, resulting in market breadth staying negative with traded volumes slipping some 20% for the day.
Despite the key index’s sustained gains, we continue to see near-term market conditions restrained by the lack of positive leads with conditions also appear toppish after the recent run-up.
Wall Street’s pullback is leaving market conditions wary with fewer impetuses for market players to nibble on.
As such, the FBM KLCI’s recent uptrend is now at risk with a consolidation in the offing. At the same time, its technical indicators are also mildly overbought which may also limit further gains.
Although the key index is poised for a pullback, the downside is relatively benign for now as there could still be pockets support to help keep the key index above the 1,630 level for the time being.
Selling pressure also appears mild amid the prognosis of the country’s firmer economic conditions, hence should lend some support. The immediate supports are at the 1,632-1,634 levels and below the 1,630 level, the other support is at 1,625 points. The hurdles, meanwhile, are at the 1,642 and 1,650 levels respectively.
Malacca Securities Research
The FBM KLCI managed to eke out marginal gains as foreigners remained net buyers for the 15th consecutive day with cumulative buying value standing at RM1.74 bil.
In contrast, the US stock markets ended on a negative note after a global cyber outage triggered by Crowdstrike’s update contributed to selling pressure on technology-related stocks.
Additionally, President Joe Biden decided to quit the election race and endorsed Kamala Harris as the Democratic nominee.
This week, investors will be monitoring Flash Manufacturing and Service PMI (Purchasing Managers’ Index), unemployment claims, core PCE (Personal Consumption Expenditures Index) and the US GDP (gross domestic product) data.
In the commodity markets, Brent crude trended sideways in a consolidation phase around US$83/barrel while gold prices dipped towards the US$2,400-US2,410/oz range. Elsewhere, CPO (crude palm oil) price rebounded off RM3,900/metric tonne and traded with a positive bias.
The FBM KLCI index ended higher towards the 1,636 level. The technical readings on the key index were positive with the MACD histogram formed another positive histogram bar and the RSI continues to trend above 50.
The resistance is envisaged around 1,651-1,656 while the support is set at 1,616-1,621. – July 22, 2024
