BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was no follow through pick-up yesterday as selling returned quickly to not only wipe out the gains from a day earlier but also to lose further ground that left the key index at a fresh two year low.
Market conditions turned weaker in tandem with the sell-off in Asian equities on the heightened recession concerns.
Lower liners and broader market shares also saw quick profit taking that evaporated the gains attained a day earlier with market breadth turning negative again.
While we envisioned Malaysian equities to mount a rebound from its oversold conditions yesterday, selling pressure remained unabated that left the FBM KLCI in the doldrums once again.
Consequently, there is no change to the market’s near-term outlook with the dour trend expected to continue to take hold.
The prevailing economic and interest rate concerns will continue to keep investor confidence in check and with fewer catalysts, the market is likely to continue its downward drift for longer amid the prolonged weak market prognosis.
With the sustained selling sending the key index below its successive support levels lately, the minor support at 1,430 level is also looking precarious.
Below that, the supports are now pegged at the 1,420-1,423 levels followed by the 1,410 level. The hurdles, meanwhile, are at the 1,440-1,442 levels and at 1,450 points respectively.
Malacca Securities Research
The FBM KLCI tumbled more than 1.8% along with regional peers as pervasive fears over recession rippled through the markets.
We believe the sentiment will remain negative-bias as investors mulled the US Federal Reserve’s chairman’s testimony on the commitment in interest rate hikes to tame inflation, while eyeing Malaysia’s and Japan’s inflation rate tomorrow.
Nevertheless, oversold stocks may still look attractive for bargain hunting activities.
Commodities prices have shown a downtrend move amid growing recession worries; Brent crude price hovered around US$111/barrel while crude palm oil (CPO) price dropped to RM4,600/metric tonne.
The FBM KLCI has again violated its 52-week low as the key index plummeted below the immediate support at 1,450.
Technical indicators continued to show negative momentum as the MACD Histogram narrowed towards zero while the RSI fell below the oversold 30 level.
Support is pegged along 1,400-1,420 while the resistance is located at 1,450-1,480. – June 23, 2022
