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 its upward streak yesterday as profit taking activities set in to send the key index lower.
However, the retreat was shallow as there were still buying support from foreign funds who remained net buyers to preserve the key index above the psychological 1,550 level at the close.
The lower liners also succumbed to profit taking with the FBM ACE and FBM Small Cap indices pulling back, resulting in market breadth becoming negative.
Despite yesterday’s pullback, the FBM KLCI’s technical indicators remain overbought, hence this could extend the downside pressure on these constituents.
However, with the sustained buying interest from foreign funds, the key index should be able to hold on to much of its recent gains as the selling pressure also appears benign for now.
Under the present environment, the key index may stay range-bound as it attempts to build up a base around the 1,550 level that could provide a springboard for it to head higher over the medium term, riding on the prognosis that there could be meaningful recovery in the country’s economic outlook in the months ahead.
Below the 1,550 level, the other support is at 1,546 points while the resistances remain at 1,563 and 1,570 points respectively.
Malacca Securities Research
The FBM KLCI slid marginally after a three-day winning streak as profit taking emerged while the US stock markets closed mixed prior to the release of Nvidia’s results.
This is while they are pricing in the US Federal Reserve’s minutes where most of the Fed’s officials worried on moving too quickly to cut rates and inflation might spike again with the ongoing geopolitical tension.
While the elevated interest rates environment may persist, Nvidia’s post-market results managed to beat expectations and will be able to support the overall sentiment at least for the near term.
On the local front, we reckon that the market sentiment will stay positive amid the better-than-expected corporate earnings season.
On the commodity market, Brent crude price headed higher on the back of ongoing tension in the Middle East region.
The FBM KLCI pulled back after the previous day rally. The technical readings on the key index were positive with the MACD Histogram extending another positive bar while the RSI maintains above the 50 level.
The resistance is envisaged around 1,560-1,570 while the support is set at 1,520-1,530. – Feb 22, 2024
