Selling pressure across ASEAN equities this week?

KUALA LUMPUR 8 July - Weaker sentiment in the overnight United States (US) equities market due to rising COVID-19 infection could spark further selling pressure across ASEAN equities this week. 

Maybank Investment Bank Research (Maybank IB) portrayed it as a decent change for the regional market to rebound. 

The spillover in weaker sentiment was short-lived as reports of a COVID-19 vaccine making significant progress last week cut short the selling pressure. 

“The index slid to the low of 8,456.75 before rebounding off the 50-day EMA line as buying interest emerged at the 50% instead of the 61.8% FR level.

“The rebound that followed lifted the index higher to close the week at 8,710.03 but it’s still trading at below the middle Bollinger band,” said Maybank IB.

The FTSE ASEAN 40 Index has a decent chance to test the upper resistance at 8,900.

But if it fails, this could spark a correction and drag the index towards the key support zones between 8,200 and 8,500 again.

Read : Malaysia's shares open lower

As per the FTSE Bursa Malaysia index, Maybank IB sees the FBM KLCI could be steered to higher index and challenge the current high in the near term following the establishment of a new base right above the 200-day line.

To note, the recent correction from the high of 1,590 has ended following a rebound off the 50-day EMA line last week.

ASEAN indices that show strong recoveries are ready to test major resistance ahead, Maybank IB concluded.-  DagangNews.com