What to expect on Bursa Malaysia today

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

A strong rebound in glove makers allowed the key index to close on a positive note yesterday, countering the quick profit taking among most of the previous session’s gainers.

Other healthcare stocks like LKL International Bhd also rose strongly as rotational play filtered into the segment which was seen as oversold.

Meanwhile, the lower liners made further headway, but the broader market turned mixed as profit taking activities took hold.

Still, both market breadth and depth were positive for the day.

We think that the mildly positive undertone could look to continue, and this will spur further mild bargain hunting actions, particularly on stocks that are deemed laggard, thus enabling Malaysian equities to end the week higher.

Rotational activities could also remain a feature in a move into laggards. As such, we think glove maker stocks may see a reversal as profit taking could set in following yesterday’s strong gains.

On the other hand, telecommunication stocks may see renewed interest following the merger proposal of Celcom Axiata and Digi.com.

Despite the still mildly positive market undertone, however, we think the upsides could remain measured as the buying interest is still largely selective.

Therefore, the 1,610 level is still the immediate hurdle, followed by the 1,620 level. The 1,600 points level is the near-term support, with 1,590 points being the next support.

Malacca Securities Research

The FBM KLCI posted mild gains yesterday as investors piled into glove heavyweights with the narrative of potential surge in demand for gloves amid the recent waves of COVID-19 outbreak in Europe and parts of Asia.

Tracking the overnight gains on Wall Street – Nasdaq especially – we expect the positive sentiment to spill over to technology stocks on the local front.

Commodities-wise, crude palm oil (CPO) prices saw a modest decline while the Brent oil price edged higher.

The FBM KLCI (+0.1%) stayed firmer above the 1,600 psychological level with doubled trading volume.

Technical indicators remain mixed as the MACD Histogram has extended a green bar, while the RSI continued to hover below the 50 level.

With that, we believe the market may trade with resistance pegged at 1,615-1,635, while the support level is set at 1,565-1,575. – April 9, 2021

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