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 yesterday virtually unchanged after it trended within a tight range for most of the day on the lack of a definitive trading direction.
Market conditions were still mixed but energy stocks dipped on profit taking after their recent run-up. In the broader market, conditions were also tepid that left most stocks to drift.
Nevertheless, market breadth was positive with gainers just ahead of losers for the day. However, market volumes continue to thin as participation waned.
After the recent rebound, market conditions are becoming tentative again with the dearth of new impetuses. This is prompting profit taking activities instead as market players cash-in on their winning positions.
A spate of insipid global economic data for March has re-ignited recession concerns that also sent many global indices lower recently with this trend likely to be sustained over the near term.
Consequently, the FBM KLCI could stay listless with the holding pattern to remain a feature for the time being as the selling pressure is still mild.
This should allow the FBM KLCI to stay above the 1,420 level which should also serve as a firm support for now. In the interim, there is support at the 1,425 level while the resistances are at the 1,433 and 1,442 levels respectively.
Malacca Securities Research
The FBM KLCI turned sideways with profit taking activities emerged following the negative performance on Wall Street overnight.
Further selling pressure is seen on the technology sector in the US as the market could be pricing in a recession scenario with the 10-year treasury yield dipping further.
Coupled with the private payrolls that came in below expectations, we believe selling activities may spill over to stocks on the local front; specifically technology stocks.
Commodities-wise, Brent crude continues to trade around US$84/barrel while crude palm oil (CPO) traded slightly below RM3,900/metric tonne. Gold, the safe haven asset, is trading above the USD2,000/ounce level.
The FBM KLCI maintained its position above the daily EMA20 zone. Meanwhile, both the MACD (MACD Histogram above zero) and RSI (above 50) are suggesting that the momentum is still positive.
The resistance is located around 1,440-1,450 while the support is located around 1,400-1,410. – April 6, 2023
