BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
An end-of-day buying on selective heavyweights helped to haul the key index back to the 1,600 level in an otherwise insipid market day where foreign buyers returned to pick up some of the recent beaten down stocks.
In other sub-indices, conditions were also mildly positive with many stocks also making headway albeit their gains were generally milder.
As a result, market breadth turned positive, but overall market participation remains on the thinner side.
Despite yesterday’s surprise gains, we continue to think that market conditions are still relatively indifferent as the gains were not due to improved undertone and we see it as just bargain hunting following the key index’s mildly oversold conditions.
Therefore, there remains little change to the market’s fundamentals that we still see is on the recovery process from the COVID-19 conditions.
As such, it remains to be seen if yesterday’s gains will be sustainable, given that the FBM KLCI’s valuations are already broadly reflective of the potentially stronger recovery in 2H 2021.
Instead, we think the key index could revert to a range-bound trend within the 1,590 and 1,610 levels over the near term as it attempts to find a firmer base after the recent weakness.
Apart from the above levels, the other support and resistance levels remain pegged at 1,580 and 1,620 respectively.
Malacca Securities Research
The FBM KLCI snapped its two-day losing streak with buying interest pushing the key index to close above the 1,600 psychological level.
We believe foreign buying support yesterday may continue to lift the FBM KLCI members in the near term.
Given the higher oil prices resulting from the recovery of global economy, coupled with the smooth on-going COVID-19 vaccination, some optimism should return to the market.
Meanwhile, the crude palm oil (CPO) price has rebounded again above the RM3,800 level.
The FBM KLCI (+1.4%) climbed back above the 1,600 psychological level with improved volume.
Technical indicators, however. are still mixed as the MACD Histogram has turned into a green bar, while the RSI continued to hover below the 50 level.
Nevertheless, we believe the key index may have positive bias move over the near term with the resistance envisaged along 1,615-1,635, while the support level is set at 1,565-1,575. – April 8, 2021