BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI started the week on a strong note, riding on the upsides among key global indices to climb past the 1,620 level and to its highest level in more than three years.
As it is, Malaysian equities continue to be buoyed by the firmer-than-expected 1Q 2024 GDP (gross domestic prouct0 as well as on optimism over China’s stimulus measures.
Market breadth was also positive as the broader market shares garnered firmer following with the day’s volume little changed at some 7 billion shares.
With market interest picking up amid the increased economic optimism, near-term market conditions are likely to hold firm which means further upsides are still in the offing.
This is likely to extend the FBM KLCI overbought conditions as there are also few signs of an imminent pullback as yet.
Although valuations are now fair after the strong year-to-date (YTD) gains, they are not excessive and should still leave room for the upsides to prolong.
Nevertheless, we think that the gains could be milder given much of the near-term positivity has already been reflected and market conditions are already toppish.
On the upside, the resistances are now at 1,630 points and 1,640 points while the supports are at 1,620 and 1,610 points respectively.
Malacca Securities Research
The overall local market conditions continued to stay bullish for most of the indices, charging towards fresh 52-week highs as foreign funds have turned net buy since last week on the YTD basis.
We believe buying momentum may persist with the on-going trade diversions theme with the US having imposed higher tariffs on China products.
Meanwhile, sentiment on Wall Street turned mixed; Nasdaq registered fresh all-time high but the Dow Jones dipped for the session as investors re-assessed statements from the US Federal Reserve’s officials whereby some of the comments were slightly hawkish.
Nevertheless, the key focus this week will be on Nvidia’s result. On the commodity markets, Brent crude traded range-bound along US$82-US$84/barrel over the past week while gold and silver traded near their all-time high zone banking on the US rate cut expectations.
The FBM KLCI index ended higher, surpassing the 1,625 level. However, the technical readings on the key index were mixed with the MACD Histogram having formed a rounding bottom and hovers around the 0 level while the RSI maintains above 50.
The resistance is envisaged around 1,640-1,645 while the support is set at 1,605-1,610. – May 21, 2024
