BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Hong Leong IB Research
Bursa Malaysia may witness further volatility in the short term as investors recalibrate risks around (i) elevated inflation, (ii) potential capital outflows amid aggressive US Federal Reserve and quantitative tightening, (iii) protracted Russia-Ukraine war, (iv) heightened US-China conflict and (v) political fluidity amid speculation of GE15 (15th General Election) in 2H 2022.
However, the hammer candlestick pattern last Friday and a steeply oversold market may cushion further slump in the FBM KLCI with major supports at the 1,429-1,445 levels (resistances: 1,483-1,500).
Hence, the current beleaguered market presents a buying opportunity as the positives from border re-opening will still outweigh in 2H 2022 to drive economic recovery.
Malacca Securities Research
The FBM KLCI extended its whipsaw moves on Friday in a broad sell-off amid growing worries on inflationary pressure and recession fears.
As sentiment on Wall Street remained fragile following the mixed performance overnight, we foresee investors to remain cautious in the near future.
Any of the rebound move is likely to be short-lived as traders might be adopting a selling-into-strength strategy for now.
Moreover, the head of NATO (North Atlantic Treaty Organization) has warned of a long Russia-Ukraine war which may prolong inflation and further derail global economic recovery.
On the commodities front, Brent crude traded below US$115/barrel while crude palm oil (CPO) price hovered below RM5,500/metric tonne.
The FBM KLCI reached a new 52-week low on Friday on the back of heightened selling pressure.
Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI hovered below the oversold 30 level. Support is located along 1,430-1,450 while the resistance is set at 1,500-1,530. – June 20, 2022
