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 the week virtually unchanged after it managed to recoup most of its intraday losses as profit taking activities were again dominant on Bursa Malaysia.

The recovery was buoyed by an improved CPI (consumer price index) reading even as market breadth turned negative for the day.

Bursa Malaysia sub-indices also turned in a mostly mixed performance as technology stocks succumbed to profit-taking activities. Nevertheless, market interest saw modest improvements amid the improved trading interest.

We continue to think that the key index is likely to remain on a range-bound trend between the 1,440 and 1,450 levels as it attempts to build up a base around these levels.

The holding pattern is also due in part to market players continuing to assess corporate earnings performances in the ongoing results reporting season and to gauge their performance for the rest of the year and beyond.

Thus far, the spate of reported results were broadly below expectations due to the challenging economic and business environment and this could keep stock performances subdued for the time being.

The upsides could also be limited by the already fair valuations after the recent strong recovery of many index-linked stocks. Above the 1,450 level, the hurdles are at 1,455 and 1,462 points respectively while the supports are at the 1,440 level, followed by the 1,435 level.

Malacca Securities Research

The stocks on the local front were relatively stronger as compared to the regional benchmark indices.

Given the positive trading tone from Wall Street overnight, we expect buying interest to spill over towards stock on the local front within the technology stocks.

Meanwhile, the after-market hours’ announcement of a special financial zone to be created in Forest City last Friday should provide further catalysts on the broader market.

Also, since the market is focusing on the brighter economic outlook in the US, brushing off the interest rate hike concerns, downside risk may be limited.

Commodities-wise, Brent crude rose above US$84/barrel while crude palm oil (CPO) prices remained above RM3,800/metric tonne.

The FBM KLCI formed a small hammer candle above the SMA200 zone and this should provide some positive bias trading tone in the near term as the technical readings are turning more positive.

The MACD Histogram is forming a rounding bottom in the negative territory while the RSI is hovering above 50. The FBM KLCI’s resistance is located around 1,450-1,460 while support is set around 1,430-1,435. – Aug 28, 2023

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