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 rebounded yesterday, gaining back the 1,460 level once again on renewed buying interest on selected index-linked stocks, particularly banking stocks, thus enabling the key index to also buck the region’s mixed performance.
Meanwhile, the bargain hunting also extended to many broader market shares with utility stocks emerging as the day’s main movers. Market activities remain brisk as well by rising some 10% from the previous day with total gainers nearly twice the number of losers.
We see the near-term market direction remaining largely range-bound as it attempts to build up a firmer base around the psychological 1,450 level.
As it is, the conclusion of the state elections has provided some measure of calmness to the market and has allowed the key index to tip up gradually, buoyed by the continuing bargain hunting by foreign funds that have been net buyers since the start of 2H 2023.
With few signs of the bargain hunting abating, we see the upsides persisting over the near term.
However, the upsides could also be modest as it could be intertwined by bouts of profit taking as valuations have already caught up, hence slowing down the FBM KLCI’s ascend.
For now, the recent high of 1,462 points is the immediate resistance but if this is breached, the key index could target the next hurdles at the 1,465 and 1,472 levels. On the other hand, the supports are at 1,455 and 1,437 points respectively – the latter being the 200-day moving average line.
Malacca Securities Research
The FBM KLCI took another stride forward as sentiment turned more favourable yesterday.
We reckon that the key index may build onto its previous session gains driven by the (i) stable political environment, (ii) uninterrupted foreign funds inflow over the past seven consecutive trading sessions and (iii) active EPF members hitting an all-time high of 8.5 million which signals robust employment market.
The lower liners are also in a sweet spot with the quarterly reporting season shifted into higher gear.
Moving forward, investors will be keeping a close tab on the US Federal Open Market Committee (FOMC) minutes releases that may provide additional clues over the interest rate direction in the world’s largest economy.
Commodities-wise, Brent crude slipped towards US$85/barrel while crude palm oil (CPO) prices stabilised above RM3,800/metric tonnes.
The FBM KLCI advanced to form a short-term flag-formation breakout as the key index re-tested the 1,460 resistance level. Technical indicators stayed positive as the MACD Histogram extended another positive bar while the RSI is above 50.
The next resistances are located along 1,480-1,500 while the support is pegged around 1,420-1,440. – Aug 16, 2023
