What to expect on Bursa Malaysia this Monday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

Malaysian stocks continue to recover at the end of last week with market breadth staying on the positive side amid sustained bargain hunting on some beaten down stocks, particularly on the lower liners and broader market shares.

However, the key index closed marginally lower due to bouts of end-of-day profit taking, albeit still managed to end the day close to the 1,550 level.

On the whole, market participation remains on the thin side as most market players opted to stay on the sidelines.

The near-term outlook is still largely indifferent as the key index looks to maintain its stance around the psychological 1,550 level.

As it is, the market is still devoid of any direction with few available leads as there is sustained cautiousness that would leave market conditions still tentative for the time being.

However, selling pressure also looks to stay light, hence this should allow the key index to find ample support around the psychological support for the time being.

Market following would also be scant that would also see fresh buying also staying on the low side. Beneath the 1,550 level, the supports remain at the 1,545-1,548 levels and at 1,541 points, while the hurdles are pegged at 1,558 and 1,563 points respectively.

Malacca Securities Research

The FBM KLCI underperformed its regional peers due largely to final hour sell-down in selected banking and commodity-related heavyweights.

Given the buying into the dip move on Wall Street, we expect some bargain hunting activities to emerge on the local front, especially among technology stocks.

Investors may watch out for Malaysia’s inflation rate and the US Federal Open Market Committee (FOMC) meeting minutes this week.

Brent crude oil traded around US$112/barrel while crude palm oil (CPO) was priced around RM6,100/metric tonne after trending downwards in the past two weeks.

On Friday, Indonesia re-imposed a domestic sales requirement on palm oil after reversing the export ban.

The FBM KLCI finished the week marginally lower, threading below its 200-day moving average and the short term daily EMA9. Technical indicators remained mixed as the MACD Histogram expanded further above zero while the RSI is hovering below the 50 level.

Support is located at 1,500-1,530 while the resistance is set around 1,570-1,580. – May 23, 2022

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