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 continues to head higher on Friday, extending its uptrend and retesting its highest levels since February this year.

Much of the buying support on the key index constituents was from foreign funds as they continue to re-position their portfolios.

The positivity also extended to the broader market shares with lower liners also making headway to allow market breadth to tilt to the winners’ side. Traded volumes, however, eased from a day earlier.

The sustained upside continues to be welcomed as it allows the key index to claw back some of its YTD (year-to0date) losses.

At the same time, the recent gains allowed the key index to re-test its 10-month highs which have remained a formidable level to clear thus far.

As such, it could stay as a major hurdle for now and could still serve as a challenge for the key index to clear over the near-term despite the more sanguine market undertone.

This may stall the on-going rally with the key index taking a minor breather at the start of the week and this could also allow for the recent gains to be digested.

However, any downside should still find ample support due to the lack of selling pressure and the key index should stay above the 1,455 support for now.

The immediate support is at the 1,460 level while the hurdles are at the recent high of 1,466 points and 1,471 points respectively.

Malacca Securities Research

The FBM KLCI revisited the resistance along 1,465, ending on a positive note for the fifth session coupled with the effective addition of YTL Corp Bhd and YTL Power Bhd into the FBM KLCI.

Meanwhile, the US stock markets were relatively positive on the Triple Witching event last Friday. Given the (i) more positive retail sales in November, (ii) dovish tone from the US Federal Reserve in the most recent FOMC (Federal Open Market Committee) meeting and (iii) anticipation of three rate cuts by 2024, we believe there could be more upside potential to the stock markets going forward.

Also, a softer US dollar would support and lift the emerging markets higher. Thus, we opine that the market may be acquiring fundamentally solid companies in Hong Kong exchange for long term rewards.

On the commodity markets, Brent crude extended its rebound for another session to climb above US$76/barrel.

The FBM KLCI extended another bullish candle after experiencing a breakout move on Thursday. The technical readings on the key index were positive with the MACD Histogram extending the first positive bar while the RSI shot above the 60 level.

The resistance is envisaged around 1,465-1,470 while the support is set at 1,430-1,440. – Dec 18, 2023

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