BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was a strong push on index linked stocks yesterday with banking entities leading the charge in line with the hefty gains on regional markets following strong upticks in US markets.
Much of the lift emanated from renewed foreign buying on many FBM KLCI constituents while on the broader market, technology stocks led the gainers with mild renewed buying.
As expected, gainers overpowered losers by a wide margin as many of the lower liners also made headway yesterday.
All-in-all, yesterday’s gains were much firmer-than-expected with the return of buying interest from foreign sources on many index-linked stocks to also allow the FBM KLCI to pierce through the 1,550 resistance.
After yesterday’s strong gains, however, the upsides may have been overdone and further upsides could become more difficult to come by.
Therefore, quick profit taking could make a comeback as overall market sentiments are still largely cautious due to the ongoing pandemic conditions.
Nevertheless, any pullback is likely to be mild due to the new-found stability in the country’s political environment as well as from the selective re-opening of the economy.
The immediate resistance is at 1,556 points followed by the 1,560 level. On the downside, the supports are at 1,533 and 1,525 points respectively.
Malacca Securities Research
Tracking the gains on regional bourses, the FBM KLCI surged mainly spurred by buying interest in plantation and banking heavyweights.
While the market may anticipate some potential pullback on profit taking activities, we believe overall sentiment on the local bourse should continue to be supported by broad-based recovery tone amid rising commodities prices following the smooth vaccination progress as well as investors appearing to be optimistic with the ongoing reporting season.
Meanwhile, the Baltic Dry Index was above 4,200 point on Tuesday, marking its highest point since mid-2010 with the Brent oil price rebounded to close above the US$71 level.
The FBM KLCI surged amid to close above the daily EMA120 level. Technical indicators remained positive as the MACD Histogram has extended a green bar while the RSI continues to stay above 50.
With the key index crossing above 1,540, the next resistance is at 1,565 while the support level is located at 1,520. – Aug 25, 2021
