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 made a firm comeback last Friday, ending the day just shy of the 1,460 level amid the return of buying interest on selected index-linked stocks that were beaten down a few sessions prior.

Much of the buying interest were from foreign funds as they dominated trades with broader market shares also regaining further traction after a consolidation spell.

The renewed buying interest saw traded volumes pushing past the 4.0 billion shares mark again with market breadth also turning positive.

Although Friday’s upticks were welcomed to allow the key index to retake the psychological 1,450 level as well as continuing with its base building exercise, quick profit taking activities could emerge at the start of the week with sentiments turning uncertain again after Wall Street’s steep pullback at the end of last week.

With overseas leads still scant, there could be some speculative interest on selected stocks on Bursa Malaysia after a raft of memorandums of understanding (MOUs) were signed with Chinese parties in conjunction with the Prime Minister’s visit to China over the weekend.

Still, the interest could be limited to companies that are deemed beneficiaries of the MOUs while other stocks could see indifference at the start of the week.

Consequently, we think that a pullback is likely to emerge that may leave the key index to stay broadly within its range-bound trend at the 1,450 and 1,463 levels for now. There is an interim support at 1,455 points while the other resistance is at 1,465 points.

Malacca Securities Research

The FBM KLCI gained momentum on the quadruple witching day in line with the performance of the regional stock markets.

Meanwhile, the renewed concerns over the interest rate direction have re-surfaced on Wall Street but we opine that the US Federal Reserve may keep the interest rate unchanged at least for the next Federal Open Market Committee (FOMC) meeting which will be taking place on Sept 19-20.

Despite Wall Street ending weaker last Friday, we think the overall sentiment will remain positive on the local bourse given the three MOUs worth a total of RM19.84 bil that were signed with China companies over the weekend.

Commodities-wise, Brent crude has maintained above the US$93/barrel level while crude palm oil (CPO) prices closed above the RM3,800/metric tonne level.

The FBM KLCI surpassed the 1,450 psychological level with a bullish candle. Also, the technical readings on the key index were positive with both the indicators heading upwards.

The MACD Histogram has formed a rounding bottom formation while the RSI has crossed above 50. The resistance is located around 1,465-1,470 while the support is envisaged around 1,430-1,440. – Sept 18, 2023

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