BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities continue to make headway, chalking up decent gains with rotational plays still dominating trades as foreign investors continue to be net buyers on Monday (Oct 18).
Banking and construction stocks were the main movers but commodity stocks took a breather after their recent rally.
While the index heavyweights were mostly positive, many lower liner indices ended the day slightly lower on mild profit taking albeit the overall market breadth managed to stay positive.
The near-term market conditions remain positive on the prognosis of firmer economic outlook in the last quarter of the year buoyed by the easing pandemic conditions.
At the same time, high commodity prices could continue to draw investor interest into related stocks as commodity prices are expected to stay elevated over the near-to-medium term.
Although the upsides are still in the offing, gains may also remain modest due to the already fair valuations of many stocks following their recent gains, thus prompting more mild profit taking activities as well as slowing the key index’s ascend.
As such, the 1,610 level is the immediate target followed by the 1,620 level. The supports, on the other hand, are at the psychological of 1,600 level and at 1,590 points.
Malacca Securities Research
The FBM KLCI jumped amid continued buying from foreign investors (month-to-date net inflow: RM1.46 bil) amid steady recovery tone in the country coupled with elevated commodities market environment.
Investors’ sentiment remained upbeat particularly in recovery theme stocks while the transportation and logistics counters staged a pullback in tandem with the declining Baltic Dry Index that has fallen eight straight sessions.
Also, investors or traders may position themselves ahead of the Budget 2022 which will be tabled on Oct 29.
Meanwhile, the crude palm oil (CPO) and crude oil prices both climbed, with the latter hovering above the US$85/barrel level.
The FBM KLCI breaches its immediate resistance level at 1,600 after hovering in the positive region for the entire session. Technical indicators remained positive as the MACD Histogram has extended a green bar while the RSI headed higher for the session.
The next resistance is located at 1,620 while the support is at 1,580. – Oct 20, 2021
