BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Strong foreign interest continues to lift the key index on Monday despite the already overbought conditions, pushing the FBM KLCI past the 1,600 level and to its highest level in three months.
The positivity among the index heavyweights also permeated to the lower liners and broader market shares as they also made some headway.
Volumes showed improvements due to the increased foreign buying with local players being the net sellers.
The strong interest from foreign funds has helped to defy the already overbought market conditions with few signs of a pullback as yet.
Until then, the key index stocks could still see the renewed foreign buying shoring up the market as they continue to buy into the country’s more stable political outlook and reopening theme.
This would also allow Malaysian equities to play catch up to global equities that have benefitted from the waning pandemic conditions over the past few months.
Rotational buying may still dominate trades but we also think that the overbought market conditions could mean that gains may become more modest.
The hurdles are now at 1,608-1,610 levels, followed by the 1,615 level. The 1,600 level is the immediate support followed by the 1,580 level.
Malacca Securities Research
The FBM KLCI jumped to close above the key 1,600 level amid persistent buying interest from foreign funds into heavyweights in response to positive cues from regional markets and Wall Street overnight as well as the decent progress heading towards achieving 80% vaccination rate in Malaysia.
However, with the key index notching seventh-straight winning sessions, upside may be capped as the market may digest the recent gains before more sectors showing significant recovery considering the recent overbought signals.
Nevertheless, we believe resumption of business activities should bode well for the economy as more states are moving into Phase 3-4 of the National Recovery Plan (NRP) going forward.
Commodities-wise, both crude palm oil (CPO) and crude oil prices retreated.
The FBM KLCI closed above the critical 1,600 psychological level as well as the upward sloping daily EMA 9 and EMA 20 level. Despite the MACD Histogram extended a green bar, the RSI is overbought above 70.
Hence, the resistance could be envisaged around 1,620 while the support is pegged along 1,580. – Sept 1, 2021
