BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities ended the holiday-shortened week on a firmer note, buoyed by a resurgence in banking and glove stocks – the latter resulting in the healthcare index emerging as the biggest winner last Wednesday.
The sanguinity also extended to the broader market and lower liners with most of them chalking up gains ahead of the Hari Raya break.
Given it was a half-day session, traded volumes were expectedly on the low side.
There is little change to the near-term outlook with the latest movement control order (MCO 3.0) and still high local COVID-19 infection continue to dominate market sentiment.
However, with the FBM KLCI finding some measure of support at around the 1,570 level, we think the key index could be attempting to build-up a base with continuing support on commodity stocks over the near term.
This comes amid the recent rises in commodity prices that could also provide some renewed bargain hunting opportunities on some of the stocks in the plantation and oil & gas segments.
Amid the continuing base building exercise, the near-term upside bias also looks to sustain for the time being with the key index potentially targeting the 1,590 level before making a pass at the psychological 1,600 points level.
On the downside, the supports are at 1,573 and 1,565 respectively.
Malacca Securities Research
Last week, the FBM KLCI finished with modest gains ahead of the festive holiday with buying interest being noticed in the healthcare sector amid rising COVID-19 infection globally.
Despite the positive performance on Wall Street overnight, we expect the sentiment to remain weak given the MCO 3.0 environment as well as the geopolitical tension in the Middle East which has brought the Brent oil price slightly higher last Friday.
Meanwhile, the crude palm oil (CPO) futures climbed above RM4,500 per tonne last week.
The FBM KLCI ended mildly higher on the back of bargain hunting in selected heavyweights.
Technical indicators turned mixed; the MACD Histogram has turned green while the RSI is hovering below the 50 level.
We expect trading volume to resume as the market re-opens from a long weekend, with support set around 1,555-1,565, while the resistance is envisaged along 1,600-1,620. – May 17, 2021
