BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities managed to mount a rebound at the end of last week, buoyed by the better-than-expected 1Q 2022 GDP data and the improved performance of regional indices.
However, the FBM KLCI closed off its day high on late profit taking but technology stocks were the big gainers on renewed bargain hunting.
The broader market and lower liners also rebounded that allowed market breadth to turn positive to end the week.
There should be further near-term gains as the market attempts to find some stability after the recent volatile spell.
The encouraging 1Q 2022 GDP data should provide some solace as it could also be a harbinger to a stronger economic performance for the rest of the year albeit economic impediments still loom large.
Key global equity markets are also seeing some signs of stability which could also provide some measure of support to the local market.
Although the upsides remain, there could still be some tentativeness due to the cautious market undertone which could slow the ascend with the key index encountering resistance at the 1,550 level.
If the level is cleared, however, the next hurdles are at 1,555 and 1,563 points respectively. The supports, on the other hand, are at 1,538-1,541 levels followed by 1,534 points.
Malacca Securities Research
The FBM KLCI ended slightly higher despite the mixed sentiment on Wall Street.
Given the persistent inflation worries, we believe the recent rebound could be short-lived with selling pressure to emerge in the near term once the US Federal Reserve’s quantitative tightening take place in June.
This may affect the sentiment on technology stocks. Back on the local front, we expect bargain hunting activities to emerge within the recovery-themed and plantation sectors ahead of the reporting season.
On the commodities front, Brent crude oil is trading above US$110/barrel as the market could be looking forward to the re-opening in China.
The FBM KLCI settled higher but still trading below its 200-day moving average. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI is hovering below the 50 level.
Support is pegged around 1,500-,1,510 while resistance is set at 1,570-1,580. – May 17, 2022
