BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities continue to make a recovery from their oversold conditions to end the week on a positive note.
However, the rebound was still relatively modest as there were still tentativeness over the direction of Bursa Malaysia. Most indices rose with the technology index advancing the most, while on the key index, banking and telco stocks were the main movers.
Market breadth was also positive which was helped by the gains on lower liners and broader market shares.
There should be further near-term gains as Malaysian equities continue to make their recovery from their oversold conditions.
However, their upsides could be tempered by bouts of quick profit taking activities as there are still few sustainable leads to keep market conditions buoyant.
As such, the slow recovery could still be modest due to a still tentative market environment that is pre-occupied by stagflation concerns which also shows few signs of subsiding as yet.
On the upside, the next target is the 1,440 level which is followed by the psychological 1,450 level. The supports, on the other hand, are at 1,430 and 1,420 points respectively.
Malacca Securities Research
The FBM KLCI closed a turbulent session mildly higher on Friday along with the regional peers as investors have priced in concerns over a potential recession moving forward.
However, given the sharp gains on Wall Street overnight, investors’ narrative may have changed for now as they may be on the look-out for opportunities given most of the stocks were bashed down to an oversold position over the past weeks.
On a side note, we believe the optimism in poultry sector may fade following the Prime Minister’s decision to retain the ceiling price of chicken.
Commodities-wise, Brent crude was traded above the US$113/barrel mark last week while crude palm oil (CPO) price declined further to RM4,650/metric tonne.
The FBM KLCI rebounded off its 52-week low following a two-session decline. Technical indicators showed improvement as the MACD Histogram crossed above the zero line while the RSI hovered above the oversold 30 level.
Resistance is located along 1,450-1,480 while the support is pegged at 1,400-1,420. – June 27, 2022
