KUALA LUMPUR (Jan 16): The local stock market may continue to trade sideways due to caution and technical reasons, according to two research houses.
“After reaching an intra-day high of 1,690.19 yesterday, the key FBM KLCI subsequently lost steam to pull back to 1,685.89 in the end.
“This suggests the benchmark index may continue its sideways trading pattern for the time being, possibly oscillating slightly above the 1,685-level ahead,” said HwangDBS Vickers Research in a morning note.
Overnight on Wall Street, major U.S. equity indices finished between -0.2% and +0.2%.
Hong Leong Investment Bank Research said near term outlook on Bursa Malaysia remains cautious and no rebound is in sight due to “the bearish MACD dead cross signal, lackluster RSI and slow stochastic indicators”.
“Unless the KLCI can stage a sustainable strong rebound to close above the immediate resistance of 10-d SMA or 1687 level for the next few days, the technical picture suggests further profit taking ahead,” it added.
Further supports are 1678 and 1658 while resistance remains at 1700, the research house said.