BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Profit taking activities continued for a second session to send the key index drifting lower again albeit it managed to stay above the psychological 1,400 level.
This time around, it was banking and energy stocks that sent the FBM KLCI lower. On the broader market, conditions were also mildly negative as profit taking also continued on many of the lower liners to leave losers inching ahead of gainers. Traded volumes were slightly lower than the previous day.
The FBM KLCI will be attempting to stay above the 1,400 level amid the continuing positivity in global equities that should also permeate to stocks on Bursa Malaysia.
As it is, conditions in the local equity market are still largely holding despite the market’s pullback over the past two sessions and should regain its traction to mount a recovery over the near term.
Overall market sentiments have also improved after a morbid 1H 2023 that has left valuations among Bursa Malaysia compelling even as corporate earnings growth prospects remains uncertain.
For now, however, any rebound is likely to be modest as buying interest is still thin and the key index could just target the 1,407 level for now before moving on to its most recent highs of 1,412-1,414 points. The 1,400 level remains the main support for now, followed by the 1,395 level.
Malacca Securities Research
Further pullback took place as investors retreated to the sidelines prior to the mid-week break.
After two days of pullback, bargain hunting activities may return to the fore as the key index may play catch-up with the positive developments on Wall Street in recent days.
Meanwhile, the lower liners may remain upbeat in view of the improved market sentiment. Meanwhile, the corporate earnings releases in both the US and Hong Kong will remain in focus.
Commodities-wise, the Brent crude hovered below US$80/barrel while the crude palm oil (CPO) consolidated around RM3,900/metric tonne.
Although the FBM KLCI formed a bearish candle, the key index remained sustained above 1,400. Technical indicators stayed positive as the MACD Histogram formed another positive bar, while the RSI hovered above 50.
Should the 1,400 level remain sustainable, the next resistance will be envisaged along 1,430-1,450 while the support is pegged around 1,370. – July 20, 2023