M+ Online Morning Market Buzz - 12 Jul 23

Dow Jones: 34,261.42 pts (+317.02pts, +0.93%)
⬆️ Resistance: 35100
⬇️ Support: 33100

FBM KLCI: 1,391.46 pts (+8.40pts, +0.61%)
⬆️ Resistance: 1430
⬇️ Support: 1360

HSI Index: 18,659.83 pts (+180.11pts, +0.97%)
⬆️ Resistance: 19800
⬇️ Support: 18000

Crude Palm Oil: RM3,916 (+RM27, +0.69%)
⬆️ Resistance: 4070
⬇️ Support: 3730

Brent Oil: $79.40 (+$1.71, +2.20%)
⬆️ Resistance: 81.10
⬇️ Support: 73.60

Gold: $1,932.23 (+$0.30, +0.02%)
⬆️ Resistance: 1980
⬇️ Support: 1870

M+ Online Technical Focus - 12 Jul 23
Volcano Bhd: Factory expansion to drive growth

Trading Catalyst
• Engages as a manufacturer of parts and components including metal and non-metal nameplates and plastic injection moulded parts.
• Purchasing a leasehold industrial land at Penang measuring 4,054 sqm for RM10.2m in bid to expand their manufacturing facility and take on additional orders.
• Operates in a healthy balance sheet with a net cash position of RM14.9m, translating to net cash per share of 9.0 sen (c. 9.4% of share price).
• Technically, price has experienced a short-term resistance breakout above RM0.935 and may target the next resistances at RM0.99-1.02 with long term target set at RM1.08.

Technical View

(i) VOLCANO (S: RM0.86, R: RM0.99-1.02, LT TP: RM1.08, CL: RM0.855)

S: Support, R: Resistance, LT TP: Long term target price, CL: Cut loss

Source: Bloomberg, M+ Online

Market update: The FBM KLCI advanced in tandem with the mostly positive regional peers. Looking ahead, we reckon that the key index may look to take a jab towards the 1,400 psychological level as sentiment remains in favour. The lower liners are also benefitting with rotational play that were evident across the board, whilst trading activities gather pace as traders nibble onto beaten down stocks. While investors are anticipating softer US inflation data, this suggests that the monetary tightening cycle may near its peak and bodes well for the equities market. Meanwhile, the barrage of US corporate earnings releases will be in focus. Commodities wise, the Brent crude oil jumped above USD79, while the CPO climbed above RM3,900.

Sector focus: We favour the technology sector that may take cue from the positive developments on Nasdaq overnight. The energy sector may chart higher in tandem with the firmer crude oil prices. The construction sector may be boosted by the positive developments over the Kuala Lumpur-Singapore High Speed Rail (KL-SG HSR) project that is undergoing a full-fledged request for information (RFI) stage.

Stocks to watch:
Technology: GREATEC, FRONTKN, INARI, ECA
Construction: WCEHB, SUNCON, EKOVEST
Telecommunications & Media: REDTONE, STAR, CDB
Transportation & Logistics: AIRPORT, MISC, SYSCORP
Others: MSM, EWEIN, NYLEX, VOLCANO, SMRT

Source: M+ Online

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