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

The six-day upward streak on the FBM KLCI ended yesterday as the benchmark index succumbed to profit taking despite starting the day on a positive note where the 1,520 level was re-tested.

Selling activity became more pronounced from mid-day onwards. In the same vein, selling also prevailed among the lower liners with both the FBM ACE market and FBM Small Caps sustaining their pullback.

As a result, losing stocks were well ahead of gainers with traded volumes slipping below billion shares for the day.

With the upward streak ending, there could be further near-term profit taking activities as the market continues to adjust from its mildly overbought conditions.

At the same time, there are also fewer buying impetuses with little change to Bursa Malaysia’ immediate fundamental outlook which is compounded by the weakness in the regional indices.

This could leave the FBM KLCI to drift lower for the time being albeit we think that selling pressure is relatively benign and there could still be some pockets of bargain hunting to provide mild support for the key index to stay above the psychological 1,500 level.

In the interim, there is support around the 1,508-1,510 levels while the hurdles remain at 1,520 and 1,526 points respectively.

Malacca Securities Research

The FBM KLCI snapped a six-day winning streak as profit taking activities emerged despite YTL-related heavyweights gaining further momentum.

Meanwhile, US stock markets ended on a mixed note with the Dow having charged towards fresh all-time highs while the S&P500 and Nasdaq fell as the market stayed cautious on tech stocks prior to the conclusion of the Federal Open Market Committee (FOMC) meeting.

Hence, we expect continuation of profit taking activities on the local front with the Evergrande liquidation test.

On the commodity markets, Brent crude traded firmer above US$82/barrel after solid US jobs data suggested that US economic activities have continued to grow despite ongoing Middle East tension.

The FBM KLCI ended lower, snapping a six-day winning streak. The technical readings on the key index were positive with the MACD Histogram extending the third positive bar while the RSI maintains above the 50 level.

The resistance is envisaged around 1,520-1,530 while the support is set at 1,490-1,480. – Jan 31, 2024

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