BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks continue to consolidate yesterday after its bout of overbought recently with more profit taking coming to the fore, particularly on plantation stocks.
Foreign buying which has been the mainstay of the recent gains, have also tapered while local institutions were still net sellers.
As a result, market breadth remains negative with the broader market environment also staying mixed-to-lower due to the lack of fresh catalysts.
With the buying interest waning further, we think that the key index stocks could still consolidate further thus leaving market condition choppier to end the week.
As it is, profit taking also looks to continue due to the lack of new leads as with follow-through buying.
However, after two days of pullback, there may be some mild support to keep the key index above the 1,600 points level even as buying interest remains mostly insipid due to little change to the country’s economic and corporate fundamentals that are still affected by the pandemic.
Below the psychological 1,600 support, the other support is at 1,590 points. On the upside, the hurdles are at 1,600 and its most recent high of 1,605 points.
Malacca Securities Research
The FBM KLCI witnessed another session of pullback despite buying from local retail and foreign investors as the index constituents succumbed to further profit taking activities after rebounding in mid-morning.
With the average infection rate (R-naught) dipping below 1.0 (based on Sept 1 data) while Melaka and Negeri Sembilan being moved to Phase 2 and 3 of the National recovery Plan (NRP) from Sept 4, we believe optimism remains in the recovery theme on the local bourse.
Meanwhile, crude oil price rebounded and stood above US$72/barrel, while crude plam oil (CPO) price rose above the RM4,200 level.
The FBM KLCI closed below the SMA200 level as the key index extended its fall. Technical indicators remained mildly negative as the MACD Histogram has extended a red bar while the RSI fell below the 70 level.
Resistance is located at 1,600, while the support is pegged along 1,570-1,580. – Sept 3, 2021
