BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index sprung higher at the start of the week, extending its recovery from the steep sell-off a week ago and to also recapture the psychological 1,600 level.
Market sentiments continue to improve in tandem with the rebound in key global equity indices to aid the upsides.
The recovery also extended to the broader market with most Bursa sector indices also making headway with market breadth remaining positive. Traded volumes, however, have plateaued at just above 4 billion shares of late.
With the key index returning above the 1,600 level, the FBM KLCI has regained all of its losses from the knee-jerk sell-down.
Market sentiments are also on the mend and is further bolstered by new expectations that Malaysia’s 2Q 2024 GDP (gross domestic product) – to be announced this Friday – will be ahead of expectations.
This should continue to buoy confidence and prolong the market’s upsides. Following the full recovery from the sell-off, however, further upsides could become more measured.
There could also be also some bouts of mild profit taking activities after the recent run-up.
Under the prevailing environment, the market could find the 1,610 level a formidable level to clear. Thereafter, the resistances are at the 1,615 and 1,620 levels respectively. The 1,600 level should provide ample support for now, followed by the 1,595 level.
Malacca Securities Research
The local market gained momentum throughout last week following a significant sell-off on Monday (Aug 12) as bargain-hunting activities emerged, forming a strong hammer pattern on the weekly chart.
Similarly in the US stock markets, after experiencing the “Black Monday” sell-off, traders scooped up shares, thus completely reversing the market downturn scenario.
We believe buying interest has returned but traders will monitor upcoming important economic data, including (i) PPI (Producer Price Index); (ii) CPI (Consumer Price Index); (iii) retail sales; and (iv) the manufacturing index before committing further to the relief rebound.
In the commodity markets, Brent crude traded near US$80/barrel amid the ongoing geopolitical tension in the Middle East while gold price gained momentum by trading above US$2,420/oz. Elsewhere, CPO (crude palm oil) price remains in the downtrend phase below the RM3,800/metric tonne level.
The FBM KLCI index ended higher towards 1,606 level. However, the technical readings on the key index were mixed with the MACD histogram forming another negative bar and the RSI hooked above 50.
The resistance is envisaged around 1,621-1,626 while the support is set at 1,586-1,591. – Aug 13, 2024
