What to expect on Bursa Malaysia this Monday

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 ended Friday marginally lower as it managed to claw back most of its intraday losses to stay around the psychological 1,450 level at the close.

The overall market conditions still largely persevered on the continuing buying support from foreign funds even as plantation emerged as the day’s biggest losers.

Market breadth was also negative due to the mild profit taking on the broader market shares with traded volumes also slipping to just over 3 billion shares for the day.

With the key index holding on to the 1,450 level, market conditions should hold firm over the near term as it looks to build up a base around the level.

However, market players will also be scouring for new impetuses as the recent gains have left the key index already overbought and has yet to undergo a meaningful consolidation for the recent gains to be digested.

As a result, there could still be bouts of profit-taking activities that could temper the upsides due the already toppish market conditions and slow further upsides.

The FBM KLCI could instead linger around the 1,450 level as it awaits for more impetuses to emerge and to allow the key index to move higher.

On the upside, the hurdles are at the 1,460 and 1,467 points respectively. Below the 1,450 level, the other supports are at 1,447 and 1,436 points – the latter is also the 200-day moving average line.

Malacca Securities Research

The FBM KLCI took a step back following a string of positive performance as of late. We reckon that the profit taking activities would be healthy for recent gains to be digested while allowing the key index to come off from an overbought territory.

Still, we reckon that any potential downside will be well cushioned by the improved market sentiment. The lower liners are already undergoing a consolidation spell ahead of the quarterly reporting month.

Looking ahead, investors will be keeping a close watch on China’s manufacturing data as well as initial estimates of Eurozone’s 2Q 2023 GDP (gross domestic product) data.

Commodities-wise, Brent crude is approaching US$85/barrel while crude palm oil (CPO) hovered above RM4,000/metric tonne.

The FBM KLCI staged a mild pullback to retain its position above daily SMA200. Technical indicators, however, remained positive as the MACD Histogram extended upward while the RSI hovered slightly in the overbought territory.

Next resistances are located along 1,460-1,480 while the support is pegged around 1,420-1,440. – July 31, 2023

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