BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The FBM KLCI was still on an uptrend, extending its gains for a third straight day and taking out the 1,420 level at the close yesterday.
At the same time, the key index ended at its highest level in some two months with healthcare stocks the main movers as market players also cheered the further easing of the country’s inflation reading.
However, the broader market still succumbed to mild profit taking, resulting in losers staying ahead of gainers for the day. Traded volumes were little changed from last Friday.
Conditions on Bursa Malaysia still appear sanguine as it continues to ride on the rally in global equities as well as from renewed institutional buying on the index heavyweights, particularly from foreign funds that have been net buyers since the start of 2H 2023.
With the market’s undertone still on a positive bias, there could be more near-term upsides as bargain hunting activities look to continue thus enabling the FBM KLCI to regain further traction and to play catch-up to the performances of its regional peers.
Nevertheless, there could be some mild profit taking after the recent uptrend that should also be well absorbed, leaving the uptrend intact for the time being.
Further ahead, the resistances are at the 1,425-1,428 levels that could become a major hurdle, followed by the 1,430 level. The supports are at 1,418 points and 1,413 points respectively.
Malacca Securities Research
Strong buying interest among the key index components continues to nudge the FBM KLCI higher. The moderating inflationary pressure that recorded at +2.4% year-on-year (yoy) in June also provided near term impetus to the local bourse.
The lower liners, however, endured another session of weakness on the back of extended profit taking activities which we deemed to be healthy at this point of time premised on the overbought conditions.
Still, we expect the lower liners to play catch-up with the recovery move after the consolidation phase. Elsewhere, investors will continue to keep a close watch on the US corporate earnings releases.
Commodities-wise, Brent crude advanced beyond US$82/barrel while crude palm oil (CPO) breached RM4,100/metric tonne.
The FBM KLCI formed another bullish candle to confirm the short-term flag breakout formation. Technical indicators remained positive as the MACD Histogram added another positive bar while the RSI maintained above 50.
The next resistances are located along 1,430-1,450 while the support is pegged around 1,400. – July 25, 2023