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 FBM KLCI continued with its mild uptrend yesterday, fortifying its position above the psychological 1,600 level on the back of the sustained buying interest from foreign funds.

Despite the continuing gains, market conditions were relatively mixed as investors remained cautious given there were also fewer buying impetuses due to the lack of leads.

However, market breadth stayed positive with traded volumes also rising slightly to reach 4.7 billion shares for the day.

We to think that the key index could sustain its ongoing sideway consolidation for now due to the lack of compelling buying opportunities as valuations are already fair.

At the same time, selling pressure is also relatively benign which could also allow the key index to stay mostly range-bound for now.

Meanwhile, the key index remains overbought and this may again limit the near-term upsides and leaving the key index on a drifting mode for now.

Any gains are likely to be minute despite the continuing gains in key global equity indices as we think that a pullback is due for the recent gains to be digested.

For the time being, the 1,600 level will be the immediate support, followed by the 1,595 and 1,590 levels. The resistances, on the other hand, remain at 1,608 and 1.614 points respectively.

Malacca Securities Research

The FBM KLCI extended its rebound for a second day while the FBM Small Cap charged strongly for the session.

Over in the US, Wall Street managed to close broadly higher as Jerome Powell commented that the next move is unlikely to be a rate hike which provided reassurance on the interest rate direction to traders after digesting a hotter-than-expected PPI (producer price index) data.

Overall, we opine that buying interest could sustain in the near term in the regional and local stocks markets.

On the commodity markets, Brent crude traded lower but still ranging along the support zone of US$81-US$84/barrel while the gold price held above the US$2,350/oz level.

The FBM KLCI index ended marginally by hovering above the 1,600 level. The technical readings on the key index were mixed with the MACD Histogram falling near 0 while the RSI maintains above 50.

The resistance is envisaged around 1,620-1,625 while the support is set at 1,585-1,590. –  May 15, 2024

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