BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The selling continued among Bursa Malaysia stocks last Friday amid speculation of tighter restrictive measures to curb the spread of COVID-19 that remains on an upward trajectory of late.
As a result, the key index closed at its lowest level since mid-February this year.
Despite mild bargain hunting on stocks in the steel, technology and electronics manufacturing services (EMS) sectors, most broader market indices also ended the week on a downbeat note with losing stocks still far ahead of gaining ones.
Although there are few signs of a rebound as yet, the Government’s move to reel back on a total lockdown may provide some impetus for Malaysian equities to stage a mild rebound over the near term.
There could be some bargain hunting as most economic activities are still allowed to operate despite the rising cases, hence softening the adverse economic impact for the remainder of the quarter.
Still, we see the overall condition as being guarded since the pandemic will continue to have a negative bearing on the domestic economy that has already slowed down since the start of the year.
Therefore, any rebound is likely to be a mere adjustment from oversold for the time being. The hurdles are at 1,572 and 1,580 points respectively, while the supports are at 1,557 and the psychological 1,550 points.
Malacca Securities Research
The FBM KLCI finished lower for the third straight session as investors’ sentiment remains tilted downward amid record high COVID-19 confirmed cases.
With the enhanced movement control order (EMCO) being implemented in wider areas in the country, we expect weaker trading sentiment for this week (do note that market will be closed for Wesak Day on Wednesday).
Meanwhile, the sell-down in technology stocks may continue following overnight declines in Nasdaq. Investors may focus on high earning certainties stocks amid reporting season.
The FBM KLCI ended in the negative territory, crossing below the 1,565 support level. Technical indicators remained negative as the MACD Histogram has turned red, while the RSI was hovering below the 30 level.
Volatility trading is expected with the next support level located at 1,545, while the resistance is pegged at 1,590-1,600. – May 24, 2021
