BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index managed to post marginal gains yesterday to outpace the regional market performance with gains in selected banking and plantation heavyweights to break its two-day downward streak.
Although the FBM KLCI tipped higher, the broader market and lower liners retreated further as profit taking escalated on the continuing absence of significant leads.
This also saw market breadth remaining negative and traded volumes slipping further.
We continue to think that the near-term outlook is still one of uncertainty with concerns over the pandemic conditions and the corresponding effects on the economy casting a shadow over the FBM KLCI’s performance.
There is still limited visibility over the partial and full re-opening of the country’s economic sector due to the still high infectivity rate and that the prolonged lockdown will further derail the country’s recovery prospects.
At the same time, the equity market is still devoid of other catalysts like corporate earnings recovery that is expected to remain on a low gear.
As such, we think the mostly range-bound trend will continue for the time being, supported by bouts of bargain hunting on some of the index heavyweights as the FBM KLCI looks to stay above the critical 1,500 level for now.
The interim support remains at 1,510 points with the resistances at 1,520 and 1,530 points respectively.
Malacca Securities Research
Bucking the regional downtrend move, the FBM KLCI rebounded and posted modest gains on the back of bargain hunting activities as well as expectation on the economy re-opening by October.
Although investors will be shifting their focus from daily COVID-19 infections to the positive vaccination rate locally, the local sentiment may still remain cautious following the negative performances in China and Hong Kong after Beijing announced additional measures for the technology, education and real estate’s sectors.
On a side note, foreign investors are net seller for the third session in a row.
The FBM KLCI finished mildly higher with improvement in volume but the key index still closed below the daily EMA9 level.
Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI hovered below the 50 level.
The resistance is envisaged around 1,530-1,550, while the support level is located around 1,500 amid cautiously optimistic sentiment. – July 28, 2021
