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 retreated further yesterday as profit taking continued to dominate trades for a second day with banking heavyweights featuring among the main losers for the day.
Sentiments remained cautious despite continuing trade negotiations between the US and some of its major trading partners.
The insipid trend also extended to the lower liners that left total losers ahead of gaining stocks. Meanwhile, the selling volumes picked up but still at an anaemic level.
There is no change to the immediate market outlook and conditions are likely to stay largely directionless after the key index’s recovery from the tariff-induced sell-down that has allowed many stocks to recoup much of their losses.
At the same time, there are also fewer bargain hunting opportunities as stock valuations are also near their fair values vis-à-vis their fundamentals that are likely to weaken due to challenging external trade environment.
As such, market players will use the on-going results reports to gauge the impact of the tariffs and their prospects ahead.
With fewer near-term impetuses, the key index could remain largely range-bound for now, hovering around the 1,530 and 1,550 levels for the time being.
Apart from these levels, the other support and resistance levels are at 1,533-1,535 points and at 1,540-1,542 points respectively.
Malacca Securities Research
Although overall market conditions may stay soft pending the outcome of trade talks, we believe traders could focus on defensive sector like consumer products & services.
This includes companies like Mr DIY Group (M) Bhd, 99 Speed Mart Retail Holdings Bhd and Eco-Shop Marketing Bhd which IPO closes today (May 7) at 5pm given they have large stock keeping unit (SKU) bases that may benefit from margin improvements amid lower import costs.
With on-going contract wins in Johor and the potential momentum in Penang, we see trading opportunity in ITMAX System Bhd following irts breakout which is supported by healthy volumes.
Lastly, besides its high recurring income base (~90% of topline) and robust margins, we see accumulation opportunities in Reach Ten Holdings Bhd which we believe remains undervalued.
The key index staged a solid breakout and broke above the EMA60 with technical indicators showing positive signals. The MACD histogram continued to expand in the positive territory while the RSI is trending upward above 50.
Resistance is anticipated around 1,551-1,556 while support is located at 1,516–1,521. – May 7, 2025
