BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
As expected, stocks on Bursa Malaysia rebounded in tandem with the gains on Wall Street at the end of last week to close the day at the 1,460 level on rotational buying into banking and telco shares.
Most stocks also made headway with the lower liner and broader market indices gaining ground on improved buying interest that saw traded volumes inching closer to the 3 billion shares mark.
At the same time, market breadth also returned to the positive side.
The near-term outlook may become more guarded as market players await for the upcoming Federal Open Market Committee (FOMC) meeting to decide on the interest rate outlook.
At the same time, market conditions are also becoming toppish after a streak of gains that started in the middle of October that may slow further near-term upsides albeit technical indicators are not displaying an overbought signal as yet.
With the increased cautiousness, quick profit taking activities may emerge to temper some of the gains from recent buying.
The market may also revert to an indifferent mode as players could stay on the sidelines until there is more clarity on the interest rate direction, including Bank Negara Malaysia’s (BNM) upcoming interest rate decision on Wednesday where it may raise interest rates by another 25 basis points.
Above the 1,460 level, the next targets are at the 1,465-1,467 levels, followed by the 1,473 level. On the downside, the supports are at 1,455 and 1,450 points respectively.
Malacca Securities Research
The FBM KLCI ended positively in tandem with the regional markets, thanks to the telecommunication sector as well as the plantation heavyweights.
However, profit taking activities on Wall Street after a significant rally may cap the upside potential on the local front.
We expect the investors may take a cautious stance ahead of the important FOMC meeting that will conclude on Nov 2 (US time).
Meanwhile, traders may focus on GE15 (15th General Election) theme and position within GLCs (government-linked companies).
Commodities-wise, Brent crude is gradually declining below US$95/barrel but hovering above US$90/barrel while crude palm oil (CPO) price recouped above RM4,100/metric tonne.
The FBM KLCI rebounded higher to close above 1,450. We believe it is slightly overstretched as the MACD Histogram is forming a rounding top formation while the RSI is approaching the overbought zone.
Resistance is set around 1,465-1,480 while support is located around 1,400-1,430. – Nov 1, 2022
