BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities succumbed to further profit taking at the end of last week with selling into strength activities escalating after their recent uptrend and the corresponding overbought conditions.
At the same time, the sell-down was also more pronounced-than-expected with widespread selling that was prevalent in most Bursa Malaysia stocks – due in part to the weakness among its regional peers.
The lack of fresh buying also resulted in Friday’s total trades whittling down further.
Although the key index has retreated after the past three days’ consolidation, there could be further indifference ahead as we see fresh buying remains thin in the holiday-shortened week with many market players already on the year-end holidays.
As such, the lack of fresh buying could prolong the downside bias, and this is likely to extend the consolidation trend to the start of the week.
There are also fewer leads due to the holiday season, while the agreement on the US stimulus unlikely to provide much impetus after the strong run-up in Malaysian equities.
This means that the 1,650 support is at risk and if it is breached, the supports will be lowered to 1,641 and 1,632 points respectively. The resistances, on the hand, are at 1,663 and 1,675 points respectively.
Malacca Securities Research
Although the US stock markets ended the week on a negative tone, we opine that stocks on the local front could be due for a technical rebound after the three-day pullback last week.
We believe the Kuala Lumpur-Singapore High Speed Rail (HSR) and water-related stocks may remain in focus given the news on RM4 bil Rasau water treatment plant calling for tender next year is still fresh.
Meanwhile, we expect trading interest to rekindle in plantation sector as crude palm oil (CPO) surged and closed firmly above RM3,400 last Friday.
The FBM KLCI has performed a retracement last week near the 1,650 level. Nevertheless, we believe the key index could perform a technical rebound after the theree-day pullback. The resistance is set around 1,670-1,700, while support is envisaged around 1,640, followed by 1,620. – Dec 21, 2020
