BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There were mild upticks last Friday, buoyed by buying interest in selected banking and consumer stocks that led the key index higher.
Most equities also ended the week on a positive note as the country sees a new prime minister taking office that could give a reprieve to the political consternation that has gripped market sentiments over the past few weeks.
While most stocks gained ground, the upsides were muted amid the continuing wait-and-see stance that also saw traded volumes remaining tepid.
With the political concerns abating, the recent gains could look to sustain over the near term as the FBM KLCI continues to build up a base around the 1,500-1,520 levels.
Such efforts will be helped by optimism over the gradual re-opening of the economy even though new COVID-19 infections remain high. There is also cautious optimism over the increasing vaccination rate that could aid a firmer economic recovery in the months ahead.
For now, however, we think the upside could stay mild as there is still a measure of cautiousness with market players awaiting for more signs of an economic rebound and the composition of the new cabinet.
Therefore, the 1,520 level is still the immediate hurdle but if it is cleared, the next resistance is at 1,530 points. On the other hand, the intermediate support is at 1,515 points followed by the 1,510 level.
Malacca Securities Research
The FBM KLCI found itself on firmer footing above the 1,500 level over past week and finished the week with modest gains, driven by investors’ optimism over further relaxed standard operating procedures (SOPs) in Phase 1 states.
Also, we believe stability on the political scene following the appointment of the new prime minister may give rise to positive sentiment although risks remain with the elevated COVID-19 cases in Malaysia.
Meanwhile, investors are eyeing Malaysia’s inflation rate which will be released on Wednesday. Commodities-wise, crude palm oil (CPO) is trading below the all-time-high zone, while Brent crude oil is trading below the US$66/barrel zone.
The FBM KLCI finished marginally higher, hovering above the daily EMA9 level. Technical indicators remained mixed as the MACD Histogram has extended a red bar, while the RSI hovered above the 50 level.
With the key index hovering firmer above the 1,500 level, investors may expect a further upside towards next resistance located around 1,540 while the support level is set around 1,480. – Aug 23, 2021
