BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities made a strong push yesterday with institutional buying coming to the fore to lift the key index back to the 1,520 level.
The fresh buying emerged on hopes that the country’s political environment could show some stabilisation as well as from the easing of movement restrictions.
Consequently, market breadth became positive with many of the lower liners and broader market shares also making headway albeit milder.
While yesterday’s strong lift was welcomed to break the streak of dour market conditions, it remains to be seen if the gains are sustainable.
As it is, the country’s political environment has yet to see a resolve with elevated pandemic conditions despite more economic activities being allowed to resume.
Therefore, the bounce could still be spasmodic with quick profit taking a possibility after yesterday’s strong gains.
Nevertheless, we think that the downside risk is also easing as the heavy selling has largely dissipated, thus allowing the key index to find ample support to stay above the crucial 1,500 level over the near term.
In the interim, there is support at the 1,510 level while the resistances are at 1,525 and 1,530 points respectively.
Malacca Securities Research
The FBM KLCI saw a steep rise as market sentiment was positive, brushing off political uncertainty with buying interest driven by gradual re-opening of more economic activities and steady rise in vaccination rates in Malaysia.
Note that foreign fund has been a net buyer for three consecutive sessions. However, we believe the sentiment could remain cautious while waiting for a new Prime Minister being appointed after the king urging the party leaders to unite in addressing the current COVID-19 situation and economic woes.
Commodities-wise, crude palm oil (CPO) price fell on concerns over production uncertainty in the coming weeks while Brent oil declined.
The FBM KLCI jumped with improved volume, closing above the daily EMA20 level. Technical indicators turned positive as the MACD Histogram has extended a green bar, while the RSI has crossed above the 50 level.
Market may revisit next resistance around 1,540 while the support is set around 1,480. – Aug 18, 2021
