BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There were more gains on the FBM KLCI as it closes in on the 1,600 level with foreign buyers continuing to take up positions in banking and plantation stocks amid improving economic prospects and record crude palm oil (CPO) prices.
Again, the key index’s gains were a contrast to the continuing weakness in regional equities with many lower liners and broader market shares tipping higher to allow market breadth to stay positive.
Strong commodity prices have provided the lift for the key index to jump to its highest level in four months and in the process, left it overbought.
As there are no signs of a consolidation as yet, the upsides look to extend over the near term amid a still positive market undertone that will be further buoyed by easing political tensions between Russia and the Ukraine.
At the same time, high commodity prices will continue to attract rotational buying that will help to maintain the upward trajectory.
Nevertheless, volatility could increase due to the already overbought market conditions, hence this could slow the FBM KLCI’s ascend.
While the key index should be able to surpass the 1,600 level easily, further upsides may be more difficult to attain with the intermediate hurdle located at 1,602-1,605 levels.
This will be followed by the 1,611 level. The supports, meanwhile, are at 1,590 and 1,580 points respectively.
Malacca Securities Research
Despite hitting the overbought territory, the key index closed higher as plantation heavyweights rallied on the soaring CPO prices.
Along with the strong net buying from foreign funds over the past seven consecutive trading sessions, we reckon that the positive run could continue and as the key index’s underlying tone is still broadly positive.
Meanwhile, we expect rotational interest on the lower liners as traders take advantage of the improved trading liquidity.
Looking ahead, the attention will be shifted towards the US Federal Open Market Committee (FOMC) minutes meeting tonight.
The FBM KLCI continues to outperform as the key index marched higher to close marginally below the 1,600 resistance level. Technical indicators stayed positive as the MACD remained above the zero level while the RSI has hit the overbought position.
The immediate resistances are located at the 1,600-1,620 while support is now set around 1,550 followed by 1,525. – Feb 16, 2022
