BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Hong Leong Investment Bank Research
Tracking bullish Wall Street performance last Friday, the FBM KLCI may continue its technical rebound during this holiday-shortened week (Wednesday half-day trading; Thursday & Friday: Hari Raya holidays), underpinned by the bargain hunting activities on bashed down glove and technology stocks as well as plantation companies due to buoyant crude palm oil (CPO) prices.
Nevertheless, any rebound will be capped near 1,600-1,606 levels as sentiment is likely to be dampened by expanding targeted movement control order (MCO) locally and the repercussion to economic recovery momentum, coupled with the ongoing May reporting season.
On stock selection, Notion VTec Bhd (77.5 sen; not-rated; book value per share: 84 sen) is a global high precision components manufacturer for the HDD, automotive, EMS accessories, and healthcare products industries.
Technically, last Friday’s dragonfly Doji candlestick pattern potentially signals further technical rebound ahead.
A decisive push above the 80 sen (mid BB) resistance will enhance upward momentum towards 84 sen and 90.5 sen (April 26 high) while downside is strongly cushioned at 74.5 sen-73 sen-70 sen territory.
Inter-Pacific Research
Malaysian equities recovered for a second straight day to end last week on a positive note, helped by gains in glovemaker and commodity stocks as commodity prices rose, particularly CPO prices that has surpassed the RM4,000 per tonne level.
The lower liners and broader market shares also rebounded in tandem with the heavyweights and allowing for market breadth to turn positive.
Traded volumes and values, however, continue to thin as participation was still largely anaemic.
While the rebound was welcomed to break the downward streak, we see the mostly sideway trend to prevail over the near term.
We think that the key index could be attempting a holding pattern and hover near the 1,600 psychological level for the time being.
As it is, broad-based buying is still elusive given that the pandemic concerns are still heightened, and the latest round of lockdown measures could continue to hurt the country’s economic recovery prospects.
The concerns could also keep most market players on the sidelines as they also await for the released of the country’s 1Q 2021 gross domestic product (GDP) data tomorrow (May 11) before deciding on their next course of action.
The immediate hurdle is at 1,590 level, followed by the 1,600 level. The supports, on the other hand, are at 1,578 and 1,572 points respectively. – May 10, 2021
