BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The FBM KLCI ended its streak of eight straight days of losses to close the first trading day of the final quarter of the year on a positive note.
The upsides also allowed the key index to buck the continuing weakness among regional equity markets.
Although mild bargain hunting returned on some of the heavyweights, the broader market remains on a drifting mode with losers still ahead of gaining stocks. At the same time, the insipid trend saw traded volumes slipping further to below the 2 billion shares mark.
The key index should continue to see the return of bargain hunting activities to help it recover further from its oversold conditions even as there are few noteworthy leads to encourage more players back into the market.
The upsides could gather further tailwind from the overnight jump on Wall Street as market players temporarily cast aside the ongoing market impediments to pick up some of the beaten-down industry leaders, particularly on stocks whose valuations look compelling following the recent sell-off.
This should allow the FBM KLCI to retest the 1,400 points level as the recovery theme continues and if the level is cleared, the next targets are at the 1,407-1,410 levels, followed by 1,416 points. Meanwhile, the supports are at 1,394 and 1,384 points respectively.
Malacca Securities Research
Following a heavy sell-down in the past week due to continuous outflow of foreign funds, the FBM KLCI bounced higher.
Given the strong rebound on Wall Street overnight, we believe the regional markets and local bourse should trade on a higher note.
Nevertheless, the rebound may sit on a shaky ground due to lingering global recession fears and lack of fresh positive catalysts; investors may take the opportunity to sell into strength.
Commodities-wise, Brent crude price signalled a comeback to trade above US$88/barrel while crude palm oil (CPO) price hovered around RM3,480/metric tonne.
The FBM KLCI rebounded from its eight-day losing streak. Technical indicators, however, might be suggesting that the FBM KLCI is due for a rebound as the MACD Histogram is curving upwards (in the negative region) while the RSI is oversold.
The resistance is envisaged along 1,410-1,430 while support is set at 1,365-1,370. – Oct 4, 2022