TA Sector Research

Daily Brief - 29 Nov 2023

Publish date: Wed, 29 Nov 2023, 10:49 AM

Sideways Pending Clearer Leads

Stocks stayed within tight trading ranges on Tuesday amid lack of significant domestic leads, and as investors await the release of economic data from major global economies for leads. The FBM KLCI ended flat at 1,448.02 (-0.13), after oscillating between early high of 1,452.6 and low of 1,444.6, as losers beat gainers 526 to 390 on higher turnover of 3.81bn shares worth RM2.39bn.

Better Supports at 1,430/1,400; Resistance at 1,465/1,470

The local market should continue its current sideways trend pending clearer market leads, and more solid signs of recovery in the global economy. On the index, better support is at 1,430, with 1,400/1,390 as stronger chart supports, while the end June low of 1,370 will act as crucial support. Immediate resistance is at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle.

Bargain Gadang & MRCB

Gadang will need to overcome resistance from the 50%FR (35sen) to enhance upside momentum towards the 61.8%FR (37sen) and 76.4%FR (40sen) ahead, with downside cushioned by the 200-day ma (31sen). Meantime, MRCB will be more attractive to bargain on weakness towards the 76.4%FR (40sen), with better support from the 61.8%FR (38sen), for rebound upside towards the upper Bollinger band (46sen), and tougher resistance seen at the 123.6%FP (48sen) and 138.2%FP (50sen).

Asian Markets Subdued Ahead of Inflation Data

Asian markets were mixed in subdued trading on Tuesday as traders seemed reluctant to make significant moves ahead of the release of some key economic data in the coming days. The U.S., European and Chinese PMIs, Eurozone inflation data and U.S. personal consumption numbers will be released this week. Traders also were looking for additional clues about the outlook for interest rates, with optimism the US Fed is done raising rates and might consider reducing them by the second half of 2024. Fed Chair Jerome Powell is also due to speak on Friday and his words will be scrutinized by traders to gauge where rates may head.

In economic news, retail sales in Australia dipped in October, according to official government data. The figures showed a 0.2% dip in retail sales last month, after a short-lived 0.9% gain in September. South Korea’s Kospi gained 1.05% to 2,521.76, while the small-cap Kosdaq added 0.76% to 816.44. In Australia, the S&P/ASX 200 also gained 0.39% and closed at 7,015.20, while the Shanghai composite index added 0.23% to 3,038.55. Japan’s markets slipped lower, as the Nikkei 225% fell 0.12% to 33,408.39 and Topix slipped 0.12% to 2,376.71.

Wall Street Rise as Traders Digest Fed Comments

Wall Street’s main indexes finished slightly higher as traders digested remarks from Federal Reserve officials, with upbeat consumer data providing some lift. The Dow Jones Industrial Average rose 0.24% to 35,416.98. The S&P 500 ticked higher by 0.10% to 4,554.89, while the Nasdaq Composite added 0.29% to 14,281.76. Fed Governor Christopher Waller said he is "increasingly confident" that the current level of central bank's policy rate is sufficiently restrictive and even hinted at the possibility of rate cuts in the months ahead should inflation continue to fall closer to the Fed's 2% target. On the other hand, remarks from Fed Governor Michelle Bowman suggested another rake hike could be necessary to rein in inflation in a timely manner.

In economic news, the Conference Board released a report showing a rebound in U.S. consumer confidence in the month of November. On Thursday, the Commerce Department is due to release its report on personal income and spending in the month of October. The report includes readings on inflation said to be preferred by the Fed and could impact the outlook for interest rates. Boeing led the Dow higher, adding 1.4%, while Dow-member retailers Nike and Walmart gained 0.7% and 1.2%, respectively.

Source: TA Research - 29 Nov 2023

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