BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The FBM KLCI retested the 1,500 psychological level yesterday but ended short of the level as profit taking emerged late in the session and left it with modest gains at the close.
Conditions were more subdued during the session as the key index approached one of its biggest hurdles while profit taking was already building up among the broader market shares with many stocks ended the day lower and market breadth turned negative. Traded volumes were lower but stayed well above 6 billion shares level.
We maintain our view that the key index is already toppish and a pullback is due for the recent gains to be absorbed.
Except for the key index’s inability to pass the 1,500 level yesterday, there are still few signs of a meaningful pullback as yet, hence there could be more near-term upsides.
Still, we continue to think any upsides will be measured due to the toppish market conditions with technical indicators also showing increasing signs of overbought after the recent run-up.
At the same time, further gains could prompt profit taking activities, further slowing the upside potential.
Consequently, we reiterate our view that if the 1,500 level is not cleared, the market is likely to post a consolidation for the gains to be digested with the supports pegged at the 1,487-1490 levels, followed by the 1,483 level. The immediate hurdle is at 1,500 points, followed by the 1,512 level.
Malacca Securities Research
The FBM KLCI closed higher for the fifth session as buying interest were strong within the selected utilities, telco and banking heavyweights with foreign funds inflow stood firm over the past five sessions.
However, the US stock markets traded mixed whereby the Dow Jones and S&P500 dipped but Nasdaq managed to eke out small gains ahead of the CPI and PPI data that will be released later this week.
Also, with the US Treasury yield continues to hover above the 4% mark, expectations of the US Federal Reserve to begin rates cuts as soon as March has been slowly declining.
On the commodity market, Brent crude price fluctuated around the US$76-US$78/barrel zone as concerns over the Middle East and the Red Sea have contributed to the support of commodity prices.
The FBM KLCI ended higher but off the 1,500 psychological level. The technical readings on the key index were positive with the MACD Histogram extending another positive bar while the RSI maintained above the 70 level.
The resistance is envisaged around 1,500-1,510 while the support is set at 1,470-1,480. – Jan 10, 2024