What to expect on Bursa Malaysia this Wednesday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

It was a relatively mixed day on Bursa Malaysia yesterday with the index heavyweights oscillating between the positive and negative zones while the broader market stocks mounted a rebound from their oversold positions.

At the end of the session, however, the key index slipped into the red on an end-of-day sell-down.

In the broader market, construction stocks led the rebound with market breadth returning to the positive side albeit traded volumes were more tepid as it slipped below 3.0 billion shares.

After the sell-off, we think the FBM KLCI is ripe for a rebound as it now looks to climb back above the 200-day moving average after slipping below the level yesterday.

As it is, the near-term selling could be nearing an end with the return to positivity among key global indices overnight that could also provide some fresh buying impetus for stocks on Bursa Malaysia and allow for a rebound.

At the same time, the spate of better-than-expected US corporate results and potentially more stimulus from Beijing to steady the Chinese economy could also buoy sentiments on Bursa Malaysia and to help reverse its downtrend.

Beyond the immediate resistance of 1,437 points – the 200-day moving average – the subsequent resistances are at 1,440 and 1,445 points respectively. The supports, meanwhile, are at 1,434 and 1,430 points respectively.

Malacca Securities Research

The FBM KLCI ended lower for the fourth consecutive session but the overall market conditions improved with buying support within the small cap and lower liners.

Meanwhile, Wall Street’s sentiment turned positive as investors turned their focus on the earnings season as some of the mega cap corporates beat estimates, coupled with a stronger guidance from the management.

Given the oversold environment, the US 10-year Treasury yields continue to decline. With investors shifting their focus back on the earnings amid the heightened inflationary pressure, we believe overall trading mood will remain positive at least for the near term.

Commodities-wise, Brent crude declined towards the US$87/barrel zone as Israel continues to hold off from an invasion of the Gaza Strip while crude palm oil (CPO) traded below RM3,700/metric tonne.

The FBM KLCI ended lower but formed a hammer candle, maintaining above the 1,430 level. The technical readings on the key index were negative with the MACD Histogram turning flat and could be turning negative, coupled with the RSI being slightly below 50.

The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 25, 2023

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