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

After a slow start to the day where the FBM KLCI succumbed to further profit taking, it rebounded in the afternoon session to also shoot past the 1,460 hurdle and to approach its highest level in six weeks.

The gains were led by YTL Power Bhd and YTL Corp Bhd after their shares were chased up with the broader market shares also making strong up-moves.

Consequently, market breadth was positive with gainers more-than-doubling the number of losers with traded volumes also spiking to 5.6 billion shares.

Although yesterday’s rebound was welcomed and there appears to be renewed interest in Malaysian equities, it may yet prove to be sustainable as this could just be a portfolio rejigging exercise, particularly from foreign funds that were the net buyers.

Consequently, the upsides may not be sustainable if there are no follow through buying interest.

Crucially, the key index has yet to clear out of its hurdle at the 1,466 level which is also its highest level in November last year.

We see this level remaining as the biggest impediment for further gains as a failure to clear the level could lead to renewed profit taking.

At the same time, there remains no change to Bursa Malaysia’s fundamentals and this could still see the key index pulling back.

Therefore, the FBM KLCI is at the crossroads again but if the 1,466 level is cleared, the next targets are at 1,473 and the 1,477-1,480 levels. The 1,460 level is the immediate support, followed by the 1,455 level.

Malacca Securities Research

The FBMKLCI managed to close higher as traders were bullish on the stock markets with buying interest flown into several index heavyweights, contributing to a healthy market breadth.

Meanwhile, Wall Street ended on a negative tone for the second consecutive day on the back of profit taking activities despite the US Federal Reserve’s meeting minutes showing progress that inflation was under control and rate cuts may only happen in March this year.

On the commodity markets, Brent crude price climbed more than 3% amid rising tensions in the Middle East as Libya’s top oilfield production was halted following a protest.

The FBM KLCI ended higher after experiencing a flag breakout. The technical readings on the key index were positive with the MACD Histogram nearly turning positive by forming a rounding bottom while the RSI swung above the 50 level.

The resistance is envisaged around 1,470-1,480 while the support is set at 1,440-1,450. – Jan 4, 2023

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