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 failed to follow through with its gains from the end of last week as it closed lower at the start of the week amid a bout of quick profit taking, particularly on banking and plantation stocks.
The insipid market conditions were also due to the lack of leads to entice fresh buying with the key index bucking the region’s mostly positive trend.
Meanwhile, conditions in the broader market remained mostly mixed-to-lower and this resulted in the market breadth staying negative.
Market conditions are still indifferent as they are still devoid of significant catalysts, and this is likely to keep the FBM KLCI subdued for longer.
Moreover, this is also seeing the key index moving away from the trend of key global and regional indices that are regaining their traction following the month’s steep falls.
As a result, the FBM KLCI could continue to drift for the time being as market players are still wary of its near-term direction and will be unwilling to commit to fresh buying.
This also means the 1,550 level remains elusive for now with the key index looks to trend within a tight range between the above level and the immediate support of 1,540 points.
Apart from these levels, the other support and resistance are at 1,530 and 1,547 points respectively.
Malacca Securities Research
The FBM KLCI ended slightly lower on profit taking activities within selected consumer and plantation heavyweights.
We expect investors to re-assess the corporate earnings and re-position on solid companies as we head into the final day of reporting season.
Meanwhile, we expect the easing of restrictions in China to help the market sentiment overall. Hence, buying support should emerge within the technology and recovery themed sectors.
Nevertheless, upside on the broader market may be capped as traders will be focusing on inflationary pressures that may dampen corporate margins.
Commodities-wise, the Brent crude is traded above US$120/barrel while crude palm oil (CPO) is priced around RM6,200-6,300/metric tonne.
The FBM KLCI snapped its three-session winning streak to break below the daily EMA9 level. Technical indicators remained negative as the Histogram has extended a negative bar while the RSI hovered below the 50 level.
The next support level is located at 1,500-1,530 while the resistance is pegged along 1,530-1,540. – May 31, 2022
