BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks remain on the ascend, boosted by the easing global inflation concerns.
The market also brushed aside the rising domestic COVID-19 cases to sustain their recovery streak into a second straight day.
Nevertheless, market conditions were more volatile as market players were still uncertain of its direction and only late-in-the day haul on selected stocks allowed the key index to end on a firmer note.
At the same time, both market breadth and depth were still on the low-to-moderate side.
We think Malaysian equities will still be on the recovery trend, due in part to their oversold conditions and easing inflationary concerns that are deemed as transitory.
These developments should give the market more impetus to gain further ground, but we think significant gains could still be difficult to come by due to the reduced market following.
In addition, we also think that the mild bargain hunting activities could be met by bouts of quick profit taking actions.
As such, we think the persisting volatility would likely slow down near-term gains with the 1,580-1,583 level potentially a major hurdle to pass.
Thereafter, the next resistance is at the 1,590 level, while the supports are located at 1,570 and 1,565 points respectively.
Malacca Securities Research
The FBM KLCI finished higher on Tuesday after a volatile session, boosted by late bargain hunting following recent sell-down, coupled with the firmer crude oil prices.
Market sentiment is likely to remain weak as Malaysia’s COVID-19 cases continued to increase as of this juncture, while vaccine roll-out schedule is having slight delay.
However, as the market sentiment has stabilised in the global context amid the easing concerns over interest rate prospects, traders may re-look into growth companies.
The FBM KLCI extended its gains to close in the positive territory with milder volume. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI was hovering below the 50 level.
The key index is likely to trade within a tight range below 1,600 level, with support located at 1,555-1,565, while the resistance is pegged at 1,590, followed by 1,600. – May 27, 2021
