BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
After an insipid session where the FBM KLCI trended sideways, an end-of-day buying on selected index linked stocks pushed the key index past the 1,550 level and to make strong gains for the day.
Much of the gains were seen as window dressing activities with foreign funds being a strong participant in an otherwise dull trading day.
Lower liners and broader market shares were mixed and made little headway albeit market breadth was positive. Traded volumes also shot up due to the late buying.
Although yesterday’s gains were welcomed to break the insipid trend, there is no change to the market’s immediate outlook; it remains cautious due to the prevailing economic and geopolitical concerns that have yet to show signs of easing.
As a result, we think the window dressing activities could give way to quick profit taking activities again as there is no change to the market’s undertone that would inspire substantive follow through buying interest.
For now, however, we think that the selling is likely to be moderate as there may still be bouts of support.
This means that there will be ample support at the 1,550-1,560 levels for the time being that could also keep the key index near the critical 200-day MA. On the upside, the hurdles are at 1,574 and 1,580 points respectively.
Malacca Securities Research
The FBM KLCI was traded higher due to the MSCI semi-annual review and we noticed trading value surged above RM6.12 bil for the session with positive foreign inflows.
Nevertheless, we believe the global sentiment may remain tepid as (i) the Ukraine-Russia tension persists; and (ii) elevated crude oil price may continue to put soaring inflation in focus – these factors may limit the upside potential on the recent relief rebound.
Commodities-wise, crude palm oil (CPO) traded around RM6,200/metric tonne while Brent crude was priced above the US$115/barrel mark.
The FBM KLCI recovered from Monday’s losses as the key index jumped above its daily EMA60 level after a final-hour rally. Technical indicators turned positive as the MACD Histogram has formed a positive bar, while the RSI breached above 50.
Should the key index hold above 1,570, the next resistance is located around 1,580-1,600 while the support is pegged at 1,530. – June 1, 2022
