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 surprised on the upside as it gathered more momentum at the start of the week to head to the 1,560 level and extending its rally for a fourth straight day.
The gains were also in tandem with the rebound of Asia equities as the Middle East conflict abates.
Conditions in the broader market was also sanguine, allowing for many of the sold down stocks to mount a recovery. As a result, gainers beat losers by more than a 2-to-1 margin. Traded volumes, however, were more subdued at 3.5 billion shares.
Yesterday’s strong upsides were certainly unexpected as the buying interest on the index-linked stocks were more pronounced on momentum trading that started last week.
The gains were also due in part to the country’s advance GDP (gross domestic product) announcement that pointed to stronger growth in 1Q 2024.
However, the uptrend’s longevity remains in doubt as there are still few changes to country’s corporate undertone and the economic recovery remains relatively benign for now.
Also, it remains to be seen if the major hurdle at 1,560 points can be penetrated convincingly, otherwise the buying momentum may fade and a consolidation may set in.
With near-term market conditions still on a positive bias, the key index could attempt to clear the 1,560 level with the ensuing resistances set at 1,565 and 1,570 points while the supports are at 1,555 and the 1,550 levels respectively.
Malacca Securities Research
The FBM KLCI continued to charge higher for the fourth session supported by the banking stocks and positive sentiment across the board.
Meanwhile, Wall Street rebounded, snapping its recent losing streak as bargain hunting activities emerged ahead of several corporate earnings releases from Tesla, Microsoft, Apple, and Meta starting from today onwards.
Should there be positive surprises from the earnings, we believe the market may stabilised and rebound further.
Closer to home, we believe the positive momentum could persist following the KL20 summit where more investment into the technology sector is anticipated.
On the commodity markets, Brent crude steadied around US$87/barrel while gold price has fallen more than 2.7% overnight as Middle East tension subsided. The FCPO (crude palm oil futures) managed to rebound after more than two weeks of selling streak by currently trading slightly below RM4,000/metric tonne.
The FBM KLCI index ended higher for the fourth consecutive day. The technical readings on the key index were positive with the MACD Histogram forming a rounding top formation while the RSI maintains above 50.
The resistance is envisaged around 1,575-1,580 while the support is set at 1,540-1,545. – April 23, 2024
