What to expect on Bursa Malaysia this Thursday

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 retreated yesterday after it failed to break out of the 1,466 resistance, succumbing to an end-of day-selling despite posting gains for much of the day.

At the same time, the key index also ended its streak of seven days of upsides. Market conditions were mixed for the most part but telco and media stocks were the main movers.

However, market breadth turned negative as profit taking gained traction ahead of the Christmas break. Traded volumes were little changed from the day earlier.

Once again, the recent high of 1,466 points is proving to be a formidable resistance level to break despite the numerous attempts over the past few months.

As a result, the FBM KLCI is at the crossroads again and could succumb to further profit taking ahead of the long weekend.

We noted that there needs to be firmer buying interest and market undertone to help lift the key index past the level convincingly.

In the interim, there will be few notable leads as well and many market players will also be on their year-end break that could see thinner market participation in the days ahead.

Still, we think the consolidation could be light and the key index may still trend within a tight range in the day ahead and likely to stay above the 1,460-support level for now.

Below that, the other support is at 1,455 points while the immediate hurdle is the 1,466 level, followed by the 1,471 level.

Malacca Securities Research

The FBM KLCI snapped a seven-day winning streak after hitting the resistance around 1,470 as profit taking activities were noticed within the banking heavyweights.

Similarly, Wall Street upward momentum was interrupted, halting a nine-day surge despite consumer confidence index increased to a five-month high in December amid growing optimism about the current and future business conditions.

The stronger consumer behaviour may provide clues that the economy may avoid a recession next year.

Meanwhile, traders will monitor upcoming data such as the US GDP (gross domestic product) and Personal Consumption Expenditures (PCE) Price Index to determine the market’s direction going forward.

At this juncture, we expect local market movements to turn negative amid profit taking activities from Wall Street.

On the commodity markets, Brent crude prices traded near US$80/barrel as traders priced in the elevated tension in the Red Sea.

The FBM KLCI ended marginally lower after the strong rally. However, technical readings on the key index were positive with the MACD Histogram extending another positive bar while the RSI maintains above the 60 level.

The resistance is envisaged around 1,470-1,480 while the support is set at 1,440-1,450. – Dec 21, 2023

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