BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index ended Friday on another subdued note as it slipped below the 1,610 level at the close, extending its consolidation spell amid the lack of fresh buying impetuses.
The weakness also extended to the lower liners as profit taking activities emerged ahead of the long weekend.
This follows the relatively strong gains that many of these lower liners posted earlier in the week and the consolidation left market breadth negative for the day.
There remain few near-term impetuses to keep market players active with the insipid market conditions are likely to prevail for longer.
At the same time, valuations of many of the index heavyweight constituents are already fair with fewer compelling buying opportunities as the valuation of many laggards have also caught up.
Furthermore, foreign leads are also scant with the direction of interest rates and corporate earnings prospects to dictate the global equity markets moves.
As a result, the key index could retain its range-bound trend for longer, lingering within the 1,600 and 1,620 levels for the time being.
The recent consolidation also shows few signs of ending and the key index may still drift lower for now, possibly to the 1,600 level. If this level gives way, the 1,595 support will come into play while the resistances are at 1,610 and 1,615 points respectively.
Malacca Securities Research
The FBM KLCI, FBM 70 and FBM Small Cap fell prior to the long weekend break as investors were trying to lock in profits after a decent rally since early June.
Meanwhile, the overall positive sentiment in the US was driven by mega caps like Apple and Microsoft while the market focuses on the AI (artificial intelligence) theme ahead of economic data releases – retail sales (Tuesday), and Flash manufacturing and services PMI (purchasing managers’ index) on Friday as well as the US Federal Reserve’s official speech.
Given the positive sentiment in the US stock markets, we anticipate that buying support should persist within the local front.
On the commodity markets, Brent crude has rallied strongly above US$84/barrel while gold price is facing stiff resistance along the US$2,335/oz zone amid a bear flag formation. Meanwhile, CPO (crude palm oil) price hovered within a tight range between RM3,900-RM4,000/metric tonne.
The FBM KLCI index hovers around the 1,610 level. The technical readings on the key index were mixed with the MACD Histogram forming another negative bar while the RSI maintains above 50.
The resistance is envisaged around 1,625-1,630 while the support is set at 1,590-1,595. – June 18, 2024
