BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
After a brief pullback in the early part of the session, Malaysian equities resumed their uptrend last Friday to lift the FBM KLCI and allowed it to climb 3.2% for the week.
Once again, foreign funds led the buying following the release of the country’s 4Q 2021 gross domestic product (GDP) that was slightly above expectations.
Plantation stocks were the main gainers after palm prices hit record levels with banking stocks following suit. Conditions elsewhere were also positive that allowed market breadth to remain positive.
We see volatility creeping in again following the past week’s big market push that is leaving the run-up slightly overdone and this could prompt profit taking activities to set in.
Although sentiments are still holding for the most part, rising geopolitical tensions in Eastern Europe could leave condition choppier even as the country is benefitting from the higher commodity prices.
The volatility is likely to keep any further gains modest with bouts of profit taking possibly halting the key index’s charge to above the 1,580 resistance level. Beyond that, the other resistance is at the 1,587 level.
Meanwhile, the supports are at 1,570 and 1,561 points respectively.
Malacca Securities Research
The local bourse delivered a solid performance as the bulls took charge to send the FBM KLCI closing at year-to-date high.
Following the announcement of 4Q 2021 GDP data, we reckon that Malaysia’s economy is largely on track for recovery in 2022 (Bank Negara Malaysia [BNM] projection at 5.5%-6.5%) alongside with the swift COVID-19 vaccination rate.
Still, further gains could be muted by the escalating geopolitical tension between both the Russia and Ukraine.
Nevertheless, we believe traders may shift the focus towards the upcoming quarterly reporting results in coming weeks.
The FBM KLCI formed another bullish candle as the key index hit the immediate resistance of 1,570. Technical indicators stayed positive as the MACD remained above the zero level while the RSI tuned higher to hover near the overbought position.
The next resistances are located at the 1,580-1,600 while support is remained set around 1,525 followed by 1,500. – Feb 14, 2022
