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 retreated yesterday, breaking its streak of six consecutive sessions of uptick.
Mild profit emerged as market conditions become directionless which prompted market players to turn cautious.
This also led to a mixed market condition, particularly among the lower liners and broader market shares as losers were still ahead of gaining stocks.
There were, however, an improvement in traded volumes for the day.
The FBM KLCI’s cautiousness is likely to prevail for longer as market players await the US Federal Reserve’s interest rate decision where there is an anticipated 75 basis points (bps) hike.
Furthermore, domestic leads are also few and far between which would collectively leave the key index to drift further as market players look for a new direction.
Although buying interest continues to lag, there is also little selling pressure as the key index may have found an interim support at the 1,420 level which is also giving rise to some bottom fishing opportunities.
Therefore, the key index is likely to hold firm for the time being with the 1,460 level to be supported for the time being. If ths gives way, the 1,450 support will become the next support.
On the other hand, the hurdles are at 1,470 and 1,480 points respectively.
Malacca Securities Research
The FBM KLCI slipped after four straight session of gains as investors braced for a possible US interest rate hike.
As the 2Q 2022 US gross domestic product (GDP) data will be released on July 28, investors should prepare for more volatility over the near term as recession fears may return given the US economy contracted in 1Q 2022.
Hence, stocks with defensive characteristics may be in focus. Commodities-wise, Brent crude and crude palm oil (CPO) prices have stabilised around US$104/barre and RM3,700/metric tonne respectively. But we expect CPO price to see further weakness amid Indonesia’s returning export.
The FBM KLCI dipped accompanied by softer trading volumes, snapping its four-session winning streak. However, daily EMA9 has crossed above EMA20. Technical indicators remained positive as the MACD Histogram has extended a positive bar while the RSI remained above the 50 level.
Investors may watch for resistance at 1,480-1,500 while the support is located around the 1,400-1,410 zones. – July 27, 2022
