BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities mounted a come-back yesterday to break its streak of downtrend and to adjust from its bout of oversold.
The oversold conditions prompted bargain hunting with plantation stocks ended among the day’s top gainers.
Conditions in the broader market, however, remained mixed with majority stocks and the lower liners only posting a minor rebound. The upsides were also on relatively modest volumes as market interest remained thin.
While yesterday’s rebound was welcomed to break the FBM KLCI’s downtrend spell, it remains to be seen how firm the recovery could be.
As it is, market confidence is still lagging as positive leads are still far-and-in between to provide the necessary impetus for a stronger market rebound.
However, equity valuations are looking attractive after the recent falls which also appears to have been overdone.
Therefore, there could still be bargain hunting activities over the near term as the FBM KLCI looks to build-up a base around the 1,480-1,500 levels as well as continuing its adjustment from its bout of oversold.
In the interim, there are supports at the 1,470 and 1,463 levels.
Malacca Securities Research
The FBM KLCI snapped its eight-day losing streak and bounced higher, outperforming the mixed broader market.
Given the mixed trading activities on Wall Street, we believe sentiment on the local front may remain tepid ahead of the interest rate decision by the US Federal Reserve in the upcoming FOMC meeting.
On a side note, the recent South Korea strike could further impact the global supply chain of chip productions.
Commodities-wise, Brent crude is still hovering above US$120/barrel mark while crude palm oil (CPO) price hovered around RM5,800/metric tonne but may trend lower after Indonesia announced a levy rate cut to accelerate palm oil shipment.
The FBM KLCI rebounded from the 52-week low and closed above the earlier support at 1,475. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI hovered below 30.
Support is pegged along 1,450-1,475 while the resistance is set at 1,500-1,530. – June 15, 2022
