BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Quick profit taking emerged yesterday as the FBM KLCI surrendered some of its gains from Friday’s upsides albeit the key index managed to stay above the psychological 1,400 level.
The pullback was also due in part to China’s below expectation GDP (gross domestic product) performance for 2Q 2023.
Nevertheless, it was not all negative as the Bursa Malaysia sector indices were mixed with the healthcare sector emerging the day’s major mover. Market breadth also remained positive but traded volume moderated slightly to 3.6 billion shares.
After a brief bout of profit taking, we see the key index resuming its uptrend as the market’s undertone is still positive and conducive for further near-term upsides, buoyed by the sustained upsides among key global equity indices as well as fresh buying support from foreign funds that have been net buyers of late even as there is little change to the country’s economic and corporate fundamentals.
The bargain hunting will be boosted by the FBM KLCI’s still attractive valuations but we think the upsides could be more measured as market conditions are becoming more toppish after the recent upward streak.
Therefore, the FBM KLCI’s near-term resistances are pegged at the 1,412 and 1,415 levels while the supports remain at the psychological 1,400 level which is followed by the 1,395 level.
Malacca Securities Research
Mild profit taking emerged with the key index taking a step back after delivering a strong performance last week.
For now, we expect the key index to consolidate as investors could be taking this opportunity retreating to the sidelines ahead of the mid-week break.
Nevertheless, rotational play and improved market sentiment may ensure the upward momentum on the lower liners to sustain overtime.
Elsewhere, the on-going batch of corporate earnings in the US as well as several key economic data such as retail sales, industrial production and manufacturing production numbers will be in focus.
Commodities-wise, Brent crude retreated below US$80/barrel while crude palm oil (CPO) remained above RM3,800/metric tonne.
Although the FBM KLCI formed a bearish candle, the key index remained sustained above 1,400 yesterday. Technical indicators stayed positive as the MACD Histogram formed another positive bar while the RSI hovered above 50.
Should the 1,400 remain sustainable, the next resistance will be envisaged along 1,430-1,450 while the support is pegged around 1,370. – July 18, 2023