BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The FBM KLCI returned to the positive path by ending near the psychological 1,500 level yesterday after it managed to overturn its early session weakness.
The gains were anchored by telco stocks on rotational buying, but technology stocks succumbed to profit taking to be among the main losers.
Many lower liners and broader market shares also retreated after their recent gains to leave market breadth mixed. Traded volumes also moderated, slipping back below the 3 billion shares mark.
While yesterday’s gains were welcomed to break the monotony and to test the psychological 1,500 level, it remains to be seen it the level can be cleared convincingly as there is still a dearth of noteworthy catalysts.
With market activities likely to wind down ahead of the Lunar New Year break and the overnight weakness on Wall Street, quick profit taking may emerge that could negate some of yesterday’s gains.
Nevertheless, momentum appears to be picking up after the key index cleared the 200-Day Moving Average line that could still provide support to the FBM KLCI over the near term.
The 1,495 level is the immediate support, followed by the 1,490 level. Beyond the 1,500 level, the targets are at 1,505 points which is the highest closing in late December, followed by the 1,512 level.
Malacca Securities Research
The FBM KLCI rebounded, buoyed by late buying in telecommunications and industrial products & services heavyweights.
We believe the inflation rate in Eurozone as well as Bank Negara Malaysia (BNM) and Bank of Japan’s (BOJ) monetary policy decision will remain in focus.
Meanwhile, sectors such as manufacturing, construction, plantation, and agriculture may see production activities normalising going forward after the demand for migrant workers will be met under the Relaxation of Employment of Foreign Workers Plan.
Commodities-wise, Brent crude traded above US$85/barrel while crude palm oil (CPO) price consolidated towards RM3,800/metric tonne.
The FBM KLCI advanced with the daily EMA9 crossing above the SMA200 level. Technical indicators remained positive as the MACD Histogram extended a positive bar while the RSI is hovering above 50.
The key index is heading towards its resistance at 1,500-1,510 while support is pegged at 1,450-1,460. – Jan 18, 2023