BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks continue to find support, helped by rotational plays and some window dressing activities towards day-end that allowed it to close last Friday on a positive note.
However, most Bursa Malaysia indices closed in the red, succumbing to quick profit taking activities from the gains attained a day earlier, resulting in market breadth turning negative again.
Market volumes, meanwhile, picked up slightly, continuing its recent uptrend.
The confirmation of a total lockdown, however, is likely to undo the recent gains and send the market lower at the start of the week.
With most economic sectors to observe the lockdown while others to operate at significantly lower capacity, investor’s confidence will be affected, and we see a knee-jerk reaction to the lockdown decision that is likely to overwhelm market sentiments over the near term.
The latest lockdown could well be a setback to both the economic and corporate earnings recovery prospects that could add caution the market’s performance over the medium-term as well.
Depending on how severe the knee-jerk reaction is, the key index’s supports at the 1,590 and 1,580 levels now look precarious and if they give way as well, the next support around the 1,565 level could come into play.
The hurdles, meanwhile, are at 1,600 and 1,608 points respectively.
Malacca Securities Research
The FBM KLCI closed marginally higher after erasing all its intraday losses last Friday despite the gains in Telekom Malaysia and selected index-linked banking stocks, marking its fourth straight session of gains.
However, the local stocks may face selling pressure today following the National Security Council’s (MKN) decision to implement a total lockdown nationwide from June 1 on the back of spiking COVID-19 cases.
Meanwhile, crude palm oil (CPO) price has climbed above RM4,000 while the oil price is hovering around US$68-US$69 level.
The FBM KLCI climbed for the fourth straight session and closed above the 1,590 resistance level.
Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI was hovering above the 50 level.
Resistance is set around 1,600-1,610, while support is pegged along 1,550-1,555. – May 31, 2021
