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 staged a firm rebound last Friday with foreign buying emerging in the afternoon session to help the key index end at its highest level for the week.
Much of the foreign bargain hunting were on beaten down stocks in the healthcare and plantation on sectors with banking stocks also seeing some revival.
The broader market was also lifted by renewed bargain hunting that helped traded volumes surge some 50% from a day earlier.
While Friday’s strong rebound was welcomed to break some of the market’s morbid conditions, it remains to be seen if there is follow through buying as the rebound is more of an adjustment from its mild oversold for the time being.
There are also few fresh market and corporate developments to sustain the recovery with concerns still abound over the state of the economy in the pandemic environment.
As such, we see the recovery as still fleeting for now, unless the fresh buying sustains over a longer duration, and we see some mild pullback at the start of the week on quick profit taking actions.
However, we think the key index could find support around the 1,580-1,585 levels for now with the 1,570 points the next support level. The hurdles, meanwhile, are at 1,590 and 1,595 points respectively.
Malacca Securities Research
The FBM KLCI snapped the three consecutive sessions of losses on the back of bargain hunting activities after recent sell-down, bucking the downtrend in the regional markets.
Investors may continue to stay defensive amid the ongoing battle of the COVID-19 health pandemic and the recent political developments, but the downside risks may be cushioned by the rising daily vaccination rate as the government target to achieve 80% herd immunity by the third quarter of this year.
Meanwhile, the constituent changes following the semi-annual review of the FTSE Bursa Malaysia Index Series will be taking effect today.
The FBM KLCI snapped the three-session losing streak and trended higher, but still slightly below the EMA60.
Technical indicators turned positive as the MACD Histogram has turned green and the RSI is above 50 level.
We expect the key index to trade range bound below its resistance level at 1,600, while the support level is envisaged around 1,555-1,565. – June 21, 2021
