BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The weakness on Wall Street and the regional markets prompted quick profit taking activities on Bursa Malaysia yesterday, reversing the gains attained last Friday.
This follows the Federal Reserves’ hawkish statements on US interest rates that may be lifted earlier-than-expected.
As a result, the selling become overwhelming with losers ahead of gainers by a wide margin as most broader market shares also succumbed to renewed selling pressure.
Notwithstanding yesterday’s steep falls, the market may stage a quick rebound in tune with the recovery on Wall Street overnight.
With the local market still devoid of significant catalysts, market players will likely look to key foreign equity markets for leads and this could also mean volatility to remain over the near term.
Still, the key index is likely to stay broadly within a sideway trend amid the ongoing economic uncertainties. We still see the market on the thin side due to lack of leads that would also limit an upside prospects.
Therefore, the rebound could keep the near-term upsides to the 1,580 level, but if the buying sustains, the key index could target the 1,585 resistance. On the flipside, the supports are at 1,568 and 1,563 points respectively
Malacca Securities Research
The FBM KLCI surrendered its gains amid hawkish comments from the Feds, alongside its regional peers.
However, with the strong rebound overnight on Wall Street, coupled with the gradual subsiding in COVID-19 daily cases, bargain hunting may lift the sentiment on the local bourse.
Also, we believe market participants should focus on recovery theme stocks given the vaccination rate is improving in Malaysia.
Meanwhile, crude oil price has climbed near the US$75 level on the back of weaker greenback; while crude palm oil (CPO) price continued its downtrend move.
The FBM KLCI resumed its downtrend, closing again below the SMA200 level as investors’ sentiment remained tepid. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI crossed below 50 level.
We expect the key index to trade below its resistance level at 1,600 with some bargain hunting activities taking shape, while the support level is located around 1,555-1,565. – June 22, 2021
