BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities managed to post a quick recovery yesterday as mild bargain hunting emerged to haul the key index back to the 1,420 level.
The upsides were helped by a revival of interest in banking and glove maker stocks – the latter due to a sharp jump in global COVID-19 cases.
Nevertheless, market breadth was still negative as overall market conditions remained unsettled with many of the lower liner and broader market indices staying mixed-to-lower due to the thin following.
Following yesterday’s quick rebound, the near-term market outlook has improved somewhat and may continue to find solace at around the 1,420 level.
It could also be attempting to build-up a base around this level as the FBM KLCI looks to arrest its downtrend that started some two months ago.
Although the key index is attempting to find a base, sentiments are still affected by on-going economic challenges that would continue to deter fresh buying interest.
As such, any upsides could also be limited with the 1,426-1,430 levels to serve as the main near-term hurdle which is followed by the 1,440 level.
The supports, on the other hand, are at 1,411 and the psychological 1,400 level which for now should provide ample support.
Malacca Securities Research
The FBM KLCI bounced off its 52-week low to outperform the mixed regional markets, supported by bargain hunting activities in selected index heavyweights.
Nevertheless, we believe the local bourse may remain dour over the near term, taking cue from the mixed sentiment on Wall Street amid dismal earnings from banks as well as the sell-off in banking stocks in China stemming from potential defaults on debts by property developers.
Commodities-wise, Brent crude price has stabilised below the US$100/barrel mark while crude palm oil (CPO) price continues to tank by trading around RM3,650/metric tonne.
The FBM KLCI rebounded from 52-week low to close above its previous support at 1,420. Technical indicators, however, remained negative as the MACD Histogram has extended a negative bar while the RSI hovered below the 50 level.
Resistance is pegged around 1,430-1,460 while the support is set at 1,380-1,400. – July 15, 2022
