What to expect on Bursa Malaysia this Wednesday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

Profit taking emerged in the afternoon session that send the key index back below the 1,500 level at the close, reversing the gains in the morning session.

Selected recent big gainers like YTL Power International Bhd and YTL Corp Bhd led the key index lower.

Meanwhile, the broader market saw hefty selling as several counters hit limit down that resulted in market breadth becoming overwhelmingly negative with losers more than twice the number of gainers. Turnover, meanwhile, jumped to 5.8 billion shares for the day.

With the key index failing to hold on to the 1,500 level and profit taking coming to the fore, the near-term market outlook has turned weaker.

This could allow for more of the recent gains to be absorbed and to cool down the already overbought conditions.

The pullback is deemed as healthy for the recent big gainers and the firmer buying interest since the start of the year to take a breather and the gains to be digested.

As such, we think the profit taking activities may sustain over the near-term that could send the key index back to the 1,490 support level.

However, if this support also gives way, the ensuing supports are at the 1,483-1,487 levels. The resistances, meanwhile, are at the 1,498-1,500 levels, followed by the recent high closing of 1,501 points.

Malacca Securities Research

The FBM KLCI traded in a volatile manner around the 1,500 psychological level as the overall market sentiment was spooked by a few counters which hit limit-down throughout the session.

Meanwhile, the US stock markets ended mostly lower on the back of rising US Treasury yield following comments from one of the US Federal Reserve’s officials that the Fed should not rush towards cutting interest rates.

Closer to home, we believe the trading tone would stay fairly negative as we expect some of the companies that have traded significantly lower to make margin calls, thus affecting the overall market sentiment.

On the commodity markets, Brent crude price continues to trade sideways within the range of US$76-US$79/barrel.

The FBM KLCI retraced after having closed higher for two consecutive days. The technical readings on the key index were however mixed with the MACD Histogram extending a negative bar while the RSI maintains above the 50 level.

The resistance is envisaged around 1,510-1,520 while the support is set at 1,470-1,480. – Jan 17, 2024

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