BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks continue to make headway amid sustained bargain hunting on banking, consumer and oil & gas (O&G) stocks, particularly from local institutions.
This allowed the key index to reclaim the 1,550 level at the close but conditions in the broader market were mixed with loser and gainers almost equal.
Sentiments in the broader market were also affected by the strong selling on Country Heights Hollding Bhd’s shares that ended the day limit down.
Market conditions could soften in the day ahead following the steep falls on Wall Street overnight that is also likely to affect sentiments on the local bourse.
This could prompt quick profit taking actions as market conditions turn unsettled again with market players becoming cautious of the market’s near-term performance.
Despite the potentially softer trend, selling pressure appears to be still mild for now as there are still bouts of bargain hunting after the recent sell-off.
Therefore, the downsides could be contained as the key index may look to find support around the 1,550 level which is also its 200-day moving average.
Below that, the next supports are at the 1,545-1,548 levels and 1,541 points respectively. On the other hand, the resistances are at 1,558 and 1,563 points respectively.
Malacca Securities Research
The FBM KLCI rebounded as investors continued to scoop up beaten-down shares, especially the banking heavyweights.
Nevertheless, we expect market sentiment to remain fragile as volatility and selling pressure resumed on Wall Street on the back of inflation fears and weak results from retailers.
Also, the hard-hit technology stocks may face further sell-off under this interest rate hike environment.
Nevertheless, we are slightly positive on the recovery-themed sectors. Commodities-wise, both Brent crude and crude palm oil (CPO) declined further, hovering around US$109/barrel and RM6,050/metric tonne respectively.
The FBM KLCI rose for the third session and breached above the SMA200, attempting to retest its daily EMA9 level. Technical indicators are mixed, the MACD Histogram moved higher towards the zero line but the RSI is hovering below 50.
Resistance is located at 1,570-1,580 while the support is pegged around 1,530, followed by 1,500. – May 19, 2022
