BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Despite starting the day on a strong note, climbing to an intraday high of 1,660 points, there were little follow-through buying with profit taking leaving the key index on a losing note for the day.
The profit taking was broad-based with the utilities sector leading the losers while market breadth turned negative with total losers more-than-doubled the number of gainers.
Consequently, the lower liners indices like the FBM Small Cap and FBM ACE lost some 1.2% each.
After failing to extend its gains and follow-through buying appears tentative, the longevity of the on-going run-up has become uncertain.
It also appears that the 7.0% recovery over the past two weeks may have run its course that cumulated in the key index reaching a new four-year high two days ago.
Consequently, the FBM KLCI may undergo a short consolidation instead for the recent gains to be digested as the run-up could have also partly reflected some of the more positive economic undertone ahead.
With the key index unable to build on its recent gains and break out of the 1,650 level, consolidation could persist as it now takes a breather from the recent strong rebound.
There also appears to be some support that could keep the FBM KLCI above the 1,640 level for the time being. The other support is at 1,637 points while the resistances are at 1,648 points and the recent intraday high of 1,653 points respectively.
Malacca Securities Research
Stocks on the Bursa Exchange were mixed, with only a few sectors like banking, REITs, and healthcare trading higher.
On Wall Street, meanwhile, the Nasdaq and S&P 500 retraced, snapping an eight-day winning streak while the Dow Jones closed slightly lower due to profit-taking ahead of the Jackson Hole Conference this Friday.
We believe overall sentiment may weaken for stocks that rallied significantly in 1H 2024 as the market might consider their valuations overstretched ahead of earnings releases.
In the commodity markets, Brent crude declined further due to softer demand from China and fading geopolitical tensions while gold price remained above US$2,500/oz ahead of the FOMC (Federal Open Market Committee) meeting. Elsewhere, CPO (crude palm oil) prices continued to trend sideways around RM3,700/metric tonne.
The FBM KLCI index ended lower towards the 1,642 level. However, the technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI continues to trend above 50.
The resistance is envisaged around 1,657-1,662 while the support is set at 1,622-1,627. – Aug 21, 2024
