Downside Bias on Weak Buying Momentum

Bursa Malaysia shares stuck in narrow range- bound trade Friday investors continued to wind down their investments on the local market ahead of the long Chinese New Year weekend. The FBM KLCI closed flat at 1,512.28 (-0.01) after ranging between early high of 1,514.72 and low of 1,509.56, as gainers edged losers 530 to 313 on slower turnover of 1.86bn shares worth RM1.09bn.

Supports at 1,493/1,482; Resistance at 1,520/1,550

Stocks should trade sideways with downside bias given the weak buying momentum at current levels, as investors stayed cautious over the Federal Reserve's stance on interest rates and China’s patchy economic recovery. Key index supports cushioning downside will be at 1,493, 1,482 and 1,467, the respective rising 30-day, 50-day and 100-day moving averages, while immediate overhead resistance remains at 1,520, with stronger upside hurdles at 1,550 and 1,580.

Bargain AMMB & CIMB

AMMB needs decisive breakout above the 150%FP (RM4.60) to enhance upside potential towards the 161.8%FP (RM4.73), with stronger upside hurdle coming at the 176.4%FP (RM4.90), going forward. Crucial chart supports at 100-day ma (RM3.93) and 76.4%FR (RM3.76) limits downside risk. Likewise, CIMB will need breakout confirmation above the 176.4%FP (RM6.59) to boost upside momentum towards the 200%FP (RM6.91), with next major resistance from the 223.6%FP (RM7.22), and immediate supports at 138.2%FP (RM6.09) and 123.6%FP (RM5.89)

Asian Markets End Lower in Thin Holiday Trade

Asian market ended mostly lower in thin holiday trading on Monday as most major markets in the region, including the Nikkei and Hang Seng, remained shut for holidays. Traders looked ahead to the release of U.S. consumer price inflation data for January and Japanese GDP figures for the last quarter of 2023 this week for clues to the economic and monetary policy outlook. Traders also await speeches from several Fed officials this week for more cues on the Fed's rate trajectory.

Lender ANZ Group Holdings rose 1.3% and electronics retailer JB Hi-Fi soared 7.1% after reporting better-than-expected earnings results. In Australia, the S&P/ASX 200 closed 0.39% lower at 7,614.90, while India’s Nifty 50 index edged 0.76% lower to 21,616.05. Markets in mainland China, Hong Kong, South Korea and Singapore were closed for the Lunar New Year, while the Japanese market was closed for National Day.

Wall Street Mixed Ahead of Key Economic Data

Wall Street’s major indexes closed mixed overnight as traders awaited fresh inflation that will be key to determine the scope and timing of Federal Reserve rate cuts. The Dow Jones Industrial Average advanced 0.33% to settle at 38,797.38. The S&P 500 inched lower by 0.09% to end at 5,021.84, while the Nasdaq Composite slid 0.30% to close at 15,942.55. The Labor Department is due to release its report on consumer price inflation in the month of January, which could have a significant impact on the outlook for interest rates. Reports on retail sales, industrial production and consumer sentiment are also likely to attract attention later in the week.

Traders have scaled back bets on a March rate cut as a stream of warnings from cautious Fed officials ring in their ears. Mega-caps were under pressure, with Tesla Inc. down more than 2% and Nvidia Corp. erasing a rally that sent its market value above that of Amazon.com Inc. On the other hand, Diamondback Energy rose nearly 10% after announcing the acquisition of privately held Endeavor Energy for USD26 billion in a cash and stock deal.

Source: TA Research - 13 Feb 2024