BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI managed to halt its downward streak yesterday as light bargain hunting emerged on selected index heavyweights.
Plantation stocks were among the main movers due to their improved earnings performances. However, the broader market and lower liners continue to see weakness with the lack of following and leads.
As a result, market breadth remained decidedly negative as most market players still opted to stay on the sidelines.
Although market following remains largely on the low side, the key index could still be attempting to find some measure of stability after a recent consolidation that has seen it slip below the psychological 1,550 level and the 200-day moving average.
This is despite conditions remaining fluid with worries over inflation, higher interest rates and slower potential economic growth to keep investors on their toes.
Nevertheless, selling pressure seems to have abated somewhat and this could help the FBM KLCI to find some support at the 1,530 level.
For now, light buying is likely to continue and may help to lift the key index back to the 1,540 level. Thereafter, the hurdle is at the 1,548 level while the other support is at 1,520 points.
Malacca Securities Research
The FBM KLCI rebounded from a four-day losing streak amid mixed regional performances as investors scooped up beaten-down shares.
Despite the rebound on Wall Street, we believe the market sentiment will remain cautious on the back of concerns over global supply chain crisis which may slowdown the pace of economic recovery.
Meanwhile, under the current inflationary environment, investors may favour sectors that benefit from the commodity boom.
We remained optimistic on the energy sector as Brent crude remained on the high side around US$114/barrel. Meanwhile, crude palm oil (CPO) is priced around RM6,400/metric tonne.
The FBM KLCI reversed to close higher but the key index remained below SMA200. Technical indicators, however is negative as the MACD Histogram has crossed below zero, while the RSI hovered below the 50 level.
Support is positioned around 1,500-1,530 while resistance is set at 1,570-1,580. – May 26, 2022
