BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Despite the key index ending the day with minute gains, overall market sentiments were insipid yesterday, affected by talks of a more severe lockdown in Selangor as COVID-19 cases continue to spike.
Amid the weaker sentiments, selling became overwhelming with losing stocks handily beating gaining ones on a ratio of 5-to-1.
Most of the broader market and lower liner stocks succumbed to a fresh round of selling, albeit banking stocks helped to shore up the FBM KLCI.
Although the key index managed to tip higher yesterday, we think the market environment is still mired in cautiousness as the unabated local pandemic conditions have become more deeply entrenched and would continue affecting market sentiments over the near term.
A prolonged movement control order (MCO) is causing fresh concerns of slower economic and corporate earnings recovery ahead and this could further dampen the market’s outlook.
With these lingering concerns, we expect the gains to subside with the key index retreating below the 1,580 level again to around the 1,575 level amid evaporating buying interest.
The other support is at 1,570 points, while the resistances are at 1,590 and the psychological 1,600 points respectively.
Malacca Securities Research
The FBM KLCI started the week on a flattish tone after the festive holiday and market sentiment remained cautious as significant sell-down was noticed on the broader market.
While investors may be on bargain hunting following yesterday’s sell-down, market’s concern over the possibility of a full lockdown in Selangor to curb further COVID-19 infection may weigh on the local bourse.
Meanwhile, we expect commodities prices such as iron ore, crude palm oil (CPO) and oil prices to stay on upbeat note over the near term.
The FBM KLCI closed flat with volume resuming to four-week high, but the EMA20 continues to point downwards. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI continued hovering below the 50 level.
Support is set around 1,555-1,565, while the resistance is envisaged along 1,600-1,620. – May 18, 2021