What to expect on Bursa Malaysia this Monday

Inter-Pacific Research

Malaysian stocks remained on the upside to end last week on a stronger note, clearing out of the recent high of 1,412 points in the process.

There was sustained bargain hunting on plantation and banking heavyweights that provided the lift with plantation stocks buoyed by crude palm oil (CPO) prices above the RM4,000/metric tonne level.

In the broader market, however, mild profit taking emerged ahead of the weekend, sending market breadth to the negative side and traded volumes some 10% lower.

The FBM KLCI upward streak appears intact with further near-term upsides expected as the benchmark index attempts to steer clear of one of its technical hurdles.

As it is, the market’s undertone is still firming up due to the sustained bargain hunting by foreign funds that should also continue to provide the near-term impetus for the key index to extend its gains.

Market conditions are also calmer that should permit the key index to sustain its upsides albeit we do not rule out some hesitation at the start of the week on mild profit taking activities following last week’s gains.

Thereafter, we see the key index resuming its measured upsides with the next target pegged at the 1,416 level which is followed by the 1,420 level. In the meantime, the supports are at 1,412 points and at 1,407 points respectively.

Malacca Securities Research

Expectedly, the local bourse continues to make headway as bargain hunting activities are still prevalent among beaten down sector leaders of late.

The near-term outlook remains firm and we see further upsides as the key index continues its recovery trend. The lower liners may capitalise on the upward move on the back of rotational play.

Meanwhile on Wall Street, the recent batch of corporate earnings releases have failed to spark the markets and that may see some near-term weakness.

On a brighter note, markets are pricing in the final 25 basis points of interest rate hike this week and that the aggressive rate hiking campaign may likely be at the tail-end.

Commodities-wise, Brent crude oil (above US$80/barrel) was powered by signs of tightening supplies while CPO steadied above RM4,000/metric tonne.

The FBM KLCI advanced to form a short-term flag-formation breakout above EMA60. Technical indicators remained positive as the MACD Histogram formed another positive bar while the RSI steadied above 50.

The next resistances are located along 1,430-1,450 while the support is pegged around 1,370. – July 24, 2023

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