BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Hong Leong Investment Bank Research
After fluctuating between 1,557.6 and 1,539.6, the FBM KLCI tumbled 15 points to end at 1,544.7, the lowest in eight months following extension of the full movement control order (FMCO) Phase 1.
With the index still trading below the crucial neckline 1,552 (support-turned-resistance), we reckon that the bears still have the upper hand.
A decisive breach below 1,539 may send the index lower towards 1,532 (20M SMA), 1,510 and 1,500 levels. On the upside, only a strong breakout above the 1,552-1,568-1,578 congested resistances can negate the current bearish momentum.
As investors continue to weigh on the fluid domestic politics and the extension of FMCO Phase 1 (until the nation’s daily infections fall below 4,000 cases), the RM150 bil PEMULIH stimulus package and potential mid-year window dressing activities may boost sentiment in the short term towards stiff resistances near 1,552-1,568-1,578 levels.
Malacca Securities Research
The FBM KLCI plummeted to hit the lowest level in 2021, while the broader market saw more than 900 stocks closing in the red as investor sentiment was further dampened by the extension of the full lockdown which may derail the economic recovery pace.
However, we believe bargain hunting activities should emerge after the heavy sell-down following the Prime Minister’s announcement on the PEMULIH stimulus package amounting to RM150 bil to assist households and businesses affected by the pandemic.
Commodities-wise, both the crude palm oil (CPO) and oil prices experienced a pull-back.
The FBM KLCI retreated and fell beyond the immediate support level at 1,555. Technical indicators remained negative as the MACD Histogram extended another red bar, while the RSI is hovering below 50.
We expect to see some bargain hunting activities following the heavy sell-down with resistance set at 1,570-1,590, while the support level is envisaged around 1,530. – June 29, 2021
