Tech and Rubber Glove Attract Buyers on Positive News Flow

Stocks rose on Tuesday, led by the technology and semiconductor related sector following a rally in US mega tech stocks after Microsoft’s CEO recruited former OpenAI chief Sam Altman to lead a new AI research team. The FBM KLCI gained 6.48 points to end at the day’s high of

1,463.40, off an early low of 1,456.16, as gainers led losers 500 to 411 on higher turnover of 3.65bn shares worth RM2.11bn.

Resistance at 1,465/1,470; Support at 1,450/1,430

The broader market should extend consolidation pending fresh leads, while technology and rubber glove related stocks attract buyers amid positive news flow and earnings outlook. Immediate index resistance is at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle, while immediate support stays at 1,450, with 1,430, and then 1,400/1,390 as stronger chart supports.

Bargain Hartalega & Kossan

Hartalega need sustained strength above the 61.8%FR (RM2.40) to extend higher towards the 76.4%FR (RM2.63), with next hurdles from RM2.85 and the June 2022 high (RM3.01), while key chart supports from the 50%FR (RM2.21) and 38.2%FR (RM2.02) cushion downside. Kossan will need breakout confirmation above the 76.4%FR (RM1.68) to extend recovery to RM1.84 and the April 2022 high (RM1.92), while chart supports at RM1.48 and 50%FR (RM1.40) limits downside risk.

AI Optimism Buoys Asian Markets

Most Asian markets traded higher on Tuesday, tracking gains on Wall Street after Microsoft led a sharp rally in US mega cap tech stocks. Microsoft shares gained 2%, reaching a new 52- week high, after CEO Satya Nadella said former OpenAI chief Sam Altman will join the tech giant to lead a new advanced AI research team. Microsoft will also take in Greg Brockman, another OpenAI co-founder, as well as other researchers. Traders also looked ahead to the release of minutes from Federal Reserve's latest meeting later in the day for additional clues on the rate outlook.

South Korea’s Kospi rose 0.77% to end at 2,510.42, while the small-cap Kosdaq gained 0.48% at 817.01. In Australia, the S&P/ASX 200 gained 0.28% to finish at 7,078.20, and the Shanghai composite index closed nearly unchanged at 3,067.93. Taiwan’s main stock index, housing some of Asia’s biggest chipmakers and suppliers, closed up 1.20% at 17,416.70. Japan’s Nikkei 225 closed 0.10% lower at 33,354.14, down for the second straight day. The Topix slid 0.20% to 2,367.79.

Wall Street Slip as Traders Digest Earnings and Fed Minutes

Wall Street’s main indexes fell overnight as traders digest some disappointing corporate result from retailers and assessed the latest Federal Reserve meeting minutes. The Dow Jones Industrial Average fell 0.18% to 35,088.29. The S&P 500 lost 0.20% to finish the session at 4,538.19, while the Nasdaq Composite dipped 0.59% to 14,199.98. Clothing retailer American Eagle tumbled 15% after weaker-than-expected operating income guidance for the full year, while Lowe's and Best Buy have also moved to the downside after both companies reported weaker than expected fiscal third quarter revenues. Traders are also digesting minutes from the Fed's last rate-setting meeting, amid a debate over whether the rate-cut optimism that has powered the stock rally is overdone.

The Fed's minutes from its Oct. 31-Nov. 1 meeting showed the policy makers wrestling with conflicting signals and agreed to continue with caution after voting to leave the Fed funds target rate at 5.25%-5.50%. The pullback on Wall Street comes as some traders look to cash in on the recent strength in the markets, which has lifted the major averages to their best levels in over three months. On the economic front, existing home sales tumbled to their lowest level in more than 13 years as rising mortgage rates and low inventories kept potential homebuyers on the sidelines.

Source: TA Research - 22 Nov 2023