BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities made a strong push that exceeded our expectations yesterday with many index heavyweights, particularly plantation and oil & gas (O&G) stocks, rallied amid surging commodity prices.
In the process, the key index also managed to surpass its various resistance points to reach its highest level since mid-September.
The positivity also extended to the broader market and lower liners, thus enabling most stocks to end the day on a positive note.
Market sentiments have certainly improved following the recent gains that allowed market players cast aside their apprehension over the direction of Malaysian equities.
With the improved sentiment, we see equities poised for further near-term upsides as it looks to build on the gains with laggards potentially coming to the fore.
However, we also think there could be increased volatility following yesterday’s stronger-than-expected upsides with bouts of quick profit taking in the offing, particularly on plantation and O&G stocks that made strong headway of late.
This could contain the upsides and leave market conditions unsettled even as sentiments have improved.
Therefore, the upsides could be more modest with the hurdles set at 1,562 and 1,570 points respectively. The supports, meanwhile, are at the psychological 1,550 level and 1,540 points.
Malacca Securities Research
The FBM KLCI jumped and closed at intraday high for the second session, lifted by the firm buying momentum in plantation stocks amid a surge in crude palm oil (CPO) price to above RM4,800.
The market sentiment may remain positive-bias with both Johor and Pahang moving into the next phase of the National Recovery Plan (NRP) starting from tomorrow (Oct 8) while vaccination rate for adult population stood at 88.4%.
Commodities-wise, CPO price rallied amid tighter supply while copper and aluminium prices fell on demand fears. However, Brent crude oil retraced from the US$83/barrel but still trading above the US$80/barrel mark for now.
The FBM KLCI rebounded to close above the SMA50 level and the daily EMA120 level. Technical indicators turned positive as the MACD Histogram has extended a green bar, while the RSI crossed above the 50 level.
As the key index crossed above the immediate resistance of 1,550, investor may monitor for the next resistance located at 1,580. Support is pegged along 1,530. – Oct 7, 2021
