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 sustained its upward trend yesterday, buoyed by the positive undertone among global equities that also extended the key index’s upward streak to four sessions and pushed it past the 1,430 level.
This time, it was banking entities that led the key index higher with the positivity also permeated to the broader market as they staged a turnaround to chalk up decent gains as well.
As a result, market breadth turned positive with traded volumes picking up further to 3.7 billion shares for the day.
After its extended upward streak, the FBM KLCI is starting to look toppish as its technical indicators are touching overbought.
At the same time, the key index is testing its 200-day moving average line where a break of the line would suggest a new bullish trend.
This level, however, could still prove to be a formidable level to penetrate due to the already toppish conditions.
Therefore, the way up could become choppier as profit taking activities may set in if the level proves to be difficult to clear albeit there are no signs of a pullback as yet while there will be attempts to clear the level due to the still positive market undertone.
If the 200-day moving average is cleared, the next hurdles are at 1,445 points and 1,450 points while the supports are pegged at 1,433 and 1,425 points respectively.
Malacca Securities Research
The recovery trend on the local bourse remained un-interrupted for the fourth straight session after China pledged to step up policy support for its economy following a series of disappointing economic data as of late.
The lower liners also advanced as traders continued to capitalise onto the positive market sentiment.
Going forward, we expect rotational play to buoy the extended upward momentum while keeping a close tab onto the upcoming US Federal Reserve interest rate decision.
Overall, market participants are pricing in another 25 basis points of rate hike with the consensus pointing towards a potential pause in the subsequent meetings ahead.
Commodities-wise, Brent crude rallied above US$83/barrel while crude palm oil (CPO) steadied above RM4,000/metric tonne.
The FBM KLCI nudged higher as the key index re-test the SMA200 to close at the highest level since mid-March 2023.
Technical indicators remained encouraging as the MACD Histogram added another positive bar while the RSI climbed into the overbought territory. Next resistances are located along 1,450-1,470 while the support is pegged around 1,400-1,420. – July 26, 2023
