BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Hong Leong Investment Bank Research
Having soared 28 points in April, will the adage “sell in May and go away” likely to apply this year?
To recap, the FBM KLCI experienced an average -0.7% return in May with 12 declines vs eight gainers in the past 20 years.
In our view, the benchmark is likely to witness further volatility ahead given the start of the 1Q 2021 reporting season, potential slowdown in economic recovery amid surging COVID-19 infection and further tightening of standard operating procedures (SOPs) to curb the spread of the pandemic.
All eyes will be on the weak technical posture and if the FBM KLCI is able to stage a successful breakout above the key 1,608-1,621 overhead resistances. Key supports are pegged at the 1,591-1,577-1,564 zones.
Malacca Securities Research
In tandem with regional weakness, the FBM KLCI ended the week lower with persistent selling in technology counters on the broader market.
Investors are likely to stay cautious as COVID-19 daily confirmed cases remained elevated and may keep an eye on Malaysia’s Markit Manufacturing PMI that will be released today as well as the Bank Negara Malaysia’s (BNM) interest rate decision on Thursday.
Commodities-wise, both the crude palm oil (CPO) and Brent oil prices have seen a decline. In the US, growth momentum is building in line with higher estimated payrolls and lower unemployment in April on the back of climbing vaccination rate.
The FBM KLCI closed below the EMA 20 level as investors stayed on the sidelines. Technical indicators turned negative as the MACD Histogram has extended a red bar while the RSI is hovering below the 50 level.
With that, the key index may be struggling to stay above the 1,600 support level. Should the key index manage to climb, resistance level is pegged along 1,615-1,635. – May 3, 2021
