BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI regained ground at the start of the week, mainly contributed by glove maker stocks on bargain hunting amid rising Omicron cases nationwide.
Plantation and banking stocks also helped to shore up the key index with the former rising on stronger crude palm oil (CPO) prices.
In the broader market, shares also tipped higher as more market players returned to push traded volume beyond the three billion shares mark, hence enabling market breadth to stay positive.
Although yesterday’s gains were welcomed, the choppiness could return due to renewed weakness on Wall Street overnight that could dampen sentiments again.
At the same time, wariness over the rising domestic COVID-19 cases could also result in market players turning more cautious, particularly on in-person type of industries that could see reduced demand.
As such, the market could see the return of hesitancy as market players turn more defensive that could leave the key index to drift once more.
Nevertheless, selling may be less pronounced this time around with the FBM KLCI likely to remain above the 1,520 level as the selling pressure is not overwhelming.
In the interim, there is support at the 1,525 level while the resistances are at 1,532 points and 1,540 points respectively.
Malacca Securities Research
The FBM KLCI bounced back from Friday’s decline as buying interest was noticed in the glove and banking heavyweights.
However, we believe that the rebound in the healthcare sector might be short-lived as Omicron fears should subside given the hospitalisation rate is still under control.
Meanwhile, overall market sentiment should remain positive as the FBM Small Cap index is on the rise.
Commodities-wise, CPO price remained firm above the RM5,500/metric tonne while crude oil price hovered above the US$90/barrel mark, suggesting the uptrend cycle is still intact.
Also, metal-related commodities such as aluminum is trading at a 13-year high while steel rebar has been rebounding.
The FBM KLCI rebounded and closed above the immediate resistance at 1,530 and the daily EMA 60 level. Technical indicators turned positive as the MACD crossed above the zero level while the RSI hovered above 50.
The previous resistance level at 1,530 has turned support while the next support is set around 1,520. The resistance is pegged around 1,545-1,570. – Feb 8, 2022
