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 continues to retreat at the start of the week, edging lower as the market is devoid of a fresh direction while profit taking continues to unfold.
The key index’s retreat also bucked the generally positive performance among regional indices.
In the broader market, conditions were mixed-to-lower but market breadth was on the negative side as profit taking were also prevalent on many stocks. However, total volume was little changed at 5.6 billion shares.
We continue to think that market conditions are still unsettled and the market will continue to consolidate, allowing for the recent gains to be absorbed.
This means that profit taking activities are likely to prolong with market players also resorting to a wait-and-see stance until the consolidation runs its course.
The on-going results reporting could also partly dictate the market’s near-term direction as the results are seen as a harbinger of these companies’ performance over the course of the next few quarters.
In the interim, the FBM KLCI could trend within a tight range as consolidation continues that could see the key index lingering between the 1,610 and 1,620 levels for the time being. The other support and resistance levels are at 1,600 and the 1,630 points respectively
Malacca Securities Research
Profit taking activities have emerged partly on the local front after a decent stretch of rally in the past few weeks.
However, trading activities are expected to remain robust by revolving around the data centre theme given the rising demand within this segment.
Meanwhile, we expect Wall Street to stay relatively healthy in the near term supported by the technology sector.
Key events that traders will be looking forward to include the (i) manufacturing PMI (Purchasing Managers’ Index); (ii) unemployment claims; (iii) core PCE (Personal Consumption Expenditures Price) index; and (iv) US GDP (gross domestic trade) data.
On the commodity markets, Brent crude rebounded above the US$81/barrel zone ahead of the OPEC+ meeting on June 1. Meanwhile, CPO (crude palm oil) price traded range-bound above RM3,900/metric tonne.
The FBM KLCI index ended slightly lower, hovering below the 1,620 level. The technical readings on the key index were however mildly positive with the MACD Histogram extending a less positive bar while the RSI fell from overbought level.
The resistance is envisaged around 1,635-1,640 while the support is set at 1,600-1,605. – May 28, 2024
