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 ended Monday lower in tandem with losses in regional markets that were affected by fresh global inflationary concerns.
This saw the key index giving up its intraday gains as it also ended the day below the 1,520-support level again.
Expectedly, domestic leads were far and in-between that left a mostly mixed market environment.
The lower liners and broader market shares, however, continued to make small gains on mild bargain hunting actions.
Malaysian equities are seemingly finding some measure of support as the selling pressure has eased over the past few sessions.
However, a firmer rebound is still not on the cards as yet in the absence of a breakthrough in the country’s fight against the COVID-19 pandemic with the number of positive cases still in the high region.
This also places a dent in the country’s move from the ongoing restrictive movements that is having a severe impact on the economy.
In view of the lack of catalysts but with milder selling pressure, we think the key index will continue to build up a base at around the 1,500 and 1,520 levels which is crucial to serve as a springboard for a potentially stronger recovery later in the year when the pandemic conditions eases.
A break below the 1,500 points level would leave the market firmly in a bear market condition. The other support and resistance levels are at 1,492 and 1,530 points respectively.
Malacca Securities Research
The FBM KLCI retreated on Monday due to last minute profit taking activities prior to the Hari Raya Haji public holiday, mirroring the weakness across the regional markets.
Nevertheless, buying interest emerged in selected recovery theme sectors after the EMCO (enhanced movement control order) was lifted in Selangor and Kuala Lumpur.
Despite the rebound on Wall Street, we expect some initial selling activities on the local bourse with an upside likely to be capped amid the high number of daily COVID-19 cases which may dampen the pace of economic recovery.
The FBM KLCI erased all its intraday gains to close lower as the key index dipped into the negative territory in the final hour.
Technical indicators remained mixed as the MACD Histogram has extended a green bar while the RSI hovered below the 50 level.
We expect the sideways trading pattern to continue with resistance set at 1,525-1,548 while the support level is envisaged around 1,500. – July 21, 2021
