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 pulled back sharply yesterday and surrendering the psychological 1,450 level to end at the 1,440 level for the day.

Profit taking dominated trades, particularly among plantation and commodity counters following a string of weaker-than-expected results.

The selling extended to the broader market with many lower liners also retreating albeit their downsides were more measured. Still, market breadth was on the negative side but overall traded volumes held steady.

Yesterday’s pullback undid much of the recent base-building efforts and was a surprise as the market momentum was still looking to hold up amid the sustained buying on some of the index heavyweights.

Although the support gave way and profit taking picked up pace, the outlook has not turned bearish yet as the key index remains above the 200-day moving average line at 1,437 points.

However, the line is under threat from a spate of weak results from commodities players that could still weigh on market sentiments over the near-term.

Therefore, the key index is left at the crossroads once again albeit technology names could provide some support following NVIDIA’s strong results that may entice fresh buying into local technology stocks.

This may help to arrest some of the selling and provide mild market support over the near to preserve the mildly positive undertone for the time being.

On the upside, the hurdles are at 1,445 and 1,450 points respectively but if the 1,437 points gives way, the supports are lowered to 1,435 and 1,428 points respectively.

Malacca Securities Research

The FBM KLCI ended lower for the session as profit taking activities emerged without any fresh catalysts in the market.

In view of the strong overnight performance on Wall Street, coupled with a surge in Nvidia’s share price post-market following the good set of results where the earnings came in at US$6.74 bil (vs an estimated US$5.20 bil), we believe buying interest may spill over to stocks on the local front.

However, traders may shift their attention towards the US Federal Reserve chairman Jerome Powell’s speech during the Jackson Hole Symposium as his statement may change the mood of the market.

Commodities-wise, Brent crude traded mildly below US$83/barrel while crude palm oil (CPO) prices stayed above RM3,800/Metric toone.

The FBM KLCI snapped after a two-day rebound and formed a bear flag breakout. Technical indicators are still weak as the MACD Histogram continues to stay in the negative region, extending the bar negatively while the RSI has crossed below 50.

The key index resistance zone is located around 1,450-1,460. Meanwhile, the support is located around 1,430-1,435. – Aug 24, 2023

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