BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks retreated yesterday as sentiments turned sour following the weakness on Wall Street a day earlier.
However, the key index was able to find ample support and bargain hunting to allow it to end the day near the 1,550 level.
The lower liners and broader market shares, however, were mostly lower resulting in market breadth turning negative again and by a wide margin of more than a 2-to-1 ratio.
Along with the weaker market sentiments, traded volumes also slipped further.
The near-term outlook remains indifferent due in part to the insipid global equities markets and the lack of domestic leads to provide fresh buying impetus.
Consequently, the index heavyweights are likely to continue its drifting pattern to end the week with opportunistic buying but remaining on the low side.
Meanwhile, plantation stocks may see renewed weakness due to the easing palm oil prices following Indonesia’s reversal of its export ban.
For the most part, however, the selling pressure is still light and is unlikely to see a significant pullback as there will still be bouts of support.
Therefore, the FBM KLCI is likely to stay close to the 1,550 level to end the week with supports located at the 1,545-1,548 levels followed by the 1,541 level.
The resistances remain at 1,558 and 1,563 points respectively.
Malacca Securities Research
The FBM KLCI fell in tandem with most of the regional markets (except for China) due to concerns over elevated inflation and prolong Russia-Ukraine conflicts.
Investors may remain cautious over the near term as current market sentiment could be exacerbated by the ongoing volatility on Wall Street.
On a side note, Indonesia’s move to lift a ban on palm oil export could bring a relief to global market while lowering crude palm oil (CPO) prices.
At the point of writing, the CPO is priced around RM6,000/metric tonne while crude oil price remained firm above US$112/barrel.
The FBM KLCI retreated, snapping the three-day winning streak as the key index failed to sustain above its 200-day moving average. Technical indicators remained mixed as the MACD Histogram crossed above the zero line while the RSI is hovering below the 50 level.
Support is located at 1,500-1,530 while resistance is set around 1,570-1,580. – May 20, 2022
