BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks rebounded stronger-than-expected yesterday as late buying by foreign funds helped the key index to close at its highest level in nearly three weeks.
Banking stocks were among the main movers, while Petronas-linked companies also gained ground on their improved results.
Most lower liners and broader market shares also recovered, taking cue from the positivity among index-linked shares with both traded volumes and market breadth improving further.
Yesterday’s gains were a surprise, especially with foreign funds emerging as the dominant market participant in what could be seen as an early portfolio reshuffling exercise.
Nevertheless, it remains to be seen if the strong foreign participation could repeat over the near term that could provide further lift to the market.
Therefore, we think that further upsides could be more measured for now following the past three days’ gains that could prompt some profit taking actions ahead of the weekend despite the prospects of further near-term gains as market sentiments are showing some signs of improvement.
With the 1,590 level cleared, the FBM KLCI could target 1,600 points now, followed by the 1,615 level. Apart from the 1,590 support, the other notable support is at the 1,580 level.
Malacca Securities Research
The FBM KLCI climbed for the third straight session following final hour buying particularly in index-linked banking and telecommunication companies.
Market sentiment may turn positive as the recovery theme is gaining traction following the release of growing earnings in selected corporates this reporting season.
Moreover, the ongoing COVID-19 vaccination programme should support the economic recovery moving forward and investors should shift from pandemic beneficiaries to reopening of economic activities theme.
Commodities-wise, crude palm oil (CPO) staged a pullback while the oil price rose above US$69.
The FBM KLCI marked a three-session rise, crossing above the immediate resistance level at 1,590. Technical indicators turned positive as the MACD Histogram and MACD Line is recovering, while the RSI is above 50.
Should the FBM KLCI trade above 1,590, it should recover back to the next resistance level at 1,600 while support is set at 1,555-1,565. – May 28, 2021
