BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Hong Leong Investment Bank Research
After soaring 28 points in April, will the adage “sell in May and go away” apply this year?
To recap, the FBM KLCI experienced an average -0.7% return in May with 12 declines versus eight gains for the past 20 years.
We believe the market will remain jittery during this May reporting season as the benchmark index has failed to reclaim its spot above the downtrend resistance.
Overall, market sentiment is expected to remain cautious today as investors weigh the potential wave 4 COVID-19 infection in Malaysia and the re-introduction of movement control order (MCO) across six districts in Selangor to curb the outbreak.
Key supports are pegged at 1,577-1,557 while resistances are near the 1,605-1,618 zones.
Malacca Securities Research
The FBM KLCI posted losses for the third consecutive session as upward momentum on glove heavyweights has waned quickly on profit taking in the afternoon session.
Tracking the negative performance on overnight Dow, our local exchange is expected to remain subdued on the back of rising COVID-19 cases which led to a tighter MCO implementation on six districts in Selangor.
Meanwhile, the technology sector may see further pullback following the overnight decline of Nasdaq in Wall Street.
On commodities, Brent oil price has seen a spike near to two-month high on the back of demand optimism, while lumber futures charged towards all-time-high region.
The FBM KLCI extended its losses for the third straight session, hovering below the 1,600 psychological level.
Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI was hovering below the 50 level.
The next resistance is envisaged around 1,615-1,635 if the key index managed to stay above the 1,600 level; while support is set at 1,565. – May 5, 2021