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 went nowhere on the first trading day after the Lunar New Year break as it ended the day marginally lower. For most of the day, the key index was in the negative territory as mild profit taking kept it in the red amid the directionless trading.

After some hesitation, however, the lower liners and broader market shares ended firmer with buying interest returning and preserving their upsides that also allowed market breadth to end the day on the positive side.

It appears that the indifferent trend among the key index constituents is likely to continue for the time being as buying interest on these stocks remains insipid.

At the same time, there are also few catalysts to encourage increased participation on these stocks.

With the directionless pattern looking to prolong, the sideway trend will also remain a feature for the time being with market players likely to wait for the release of corporate results next month to decide on their next course of action.

This also means that the key index could trend within a narrow band of 1,490 and 1,500 for the time being. Beyond these levels, the other support and resistance levels are at 1,495 and 1,505 points respectively.

Malacca Securities Research

The FBM KLCI failed to build onto the positive momentum from the pre-CNY (Chinese New Year) moves as the key index lost ground on quick profit taking activities.

Still, we are banking on the recovery theme from China which will boost the FBM KLCI above the 1,500 level, while the lower liners may continue to capitalise on the improved trading environment and further rotational play.

Globally, the focus will shift to the preliminary reading of the US 4Q 2022 gross domestic product (GDP) data tonight.

Commodities-wise, Brent crude edged up slightly to stay above US$86/barrel but crude palm oil (CPO) price slipped below RM3,800/metric tonne on further profit taking activities.

The FBM KLCI took a step back, retreating marginally below 1,500. Technical indicators remained positive as the MACD Histogram marched higher while the RSI remains above 50.

Should 1,500 be re-tested again, the next resistances are envisaged around 1,525-1,540 while supports are located at 1,450-1,460. – Jan 26, 2023

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