BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysia equities took a firmer bounce yesterday, breaking its downward spell on bargain hunting on some of the recently beaten down stocks.
Banking stocks were the main movers, but glove maker stocks trended lower once again. The buying was broad based as gainers were well ahead of losing stocks with many of the lower liners and broader market shares also seeing increased buying interest.
While yesterday’s upsides are welcomed to break the downward spell, it remains to be seen if there will be sufficient follow-through buying to help the key index convincingly end its downward streak.
As it is, the market was tethering on oversold position with a rebound already due, hence yesterday’s upsides may just be an adjustment from oversold conditions.
Therefore, the longevity of the rebound will still be tested as the broad market conditions are still affected by the unrelenting pandemic conditions that would also keep the country’s economic outlook on a low gear.
With the FBM KLCI already passed the 1,520 level, it may now be targeting the 1,530 level with the hurdle ahead at 1,536 points.
There is an interim support at the 1,524 level with the 1,520 level to serve as the stronger support for now.
Malacca Securities Research
The FBM KLCI is expected to build onto its previous session gains with the focus now shifting back towards the economic recovery progress.
Still, we remain cautious as there were few domestic leads over the near-term outlook, hence this will further curtail any extended potential upsides.
Nevertheless, the general market undertone is improving and this will allow the lower liners to develop decent recovery after a difficult two-month period that has seen many stocks veering into the oversold region.
The FBM KLCI rebounded as the key index claw its way to close above the daily EMA9 level yesterday.
Technical indicators, however, are still mixed as the MACD Histogram has extended a green bar, but the RSI remains below the 50 level.
The key index may continue to consolidate with resistance set at 1,530-1,550 while the support level is located at 1,500. – July 23, 2021
