BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI managed to eke out minor gains on Friday (July 16) after lingering in the negative territory for most of the day, bolstered by late buying on selected index heavyweights in a day where market leads were far and in between.
Most of the broader market shares also ended the week on a positive note. For the most part, however, market conditions were relatively subdued with traded volumes still on the low-to-moderate side even as most stocks ended the day on the positive note.
With the pandemic conditions still dominating sentiments, coupled with uncertainties as to when the country could move into the next phase of the recovery, we think that the market will remain lacklustre for the time being.
As it is, there are still few market catalysts to shore up investor confidence and this is likely to see market interest still on the low side, hampering hopes for an increased uptake for local equities.
Furthermore, the lingering political concerns could keep sentiments guarded for longer and may keep a lid on the near-term recovery prospects.
Nevertheless, we think selling has abated somewhat and this should ease some of the downside risk.
As such, we think the key index could stay range-bound for longer with the key index lingering within the 1,515 and 1,530 levels for the time being. There is interim support at the 1,520 level while the other resistance is at 1,533 level.
Malacca Securities Research
The FBM KLCI registered modest gains for the week on the back of bargain hunting activities after a recent downtrend move, but daily COVID-19 cases which remained above the 10,000 mark continued to weigh on market sentiment.
Nevertheless, the new immunisation target set by the Government to fully vaccinate 100% of the adult population by October 2021 is expected to boost investors’ confidence that the country is on the path of economic recovery.
On a side note, OPEC+ has agreed to increase oil production beginning in August amid improving demand which may ease the pressure on the supplies as well as oil prices.
The FBM KLCI extended its gains for the second session on technical rebound but continued to struggle to close above the 1,525 resistance level.
Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI hovered below the 50 level.
Investors may keep an eye at the 1,525 resistance level for further upside, while the 1,500 will serve as the support. – July 19, 2021
