The day ahead

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Malacca Securities Research

The FBM KLCI performed a swift recovery as the key index recouped most of its previous session losses to re-claim the 1,600 psychological level.

We reckon some stability will ensue with further upsides are in the cards as investors continue to focus on the economic recovery progress.

Meanwhile, we believe that the lower liners will continue to enjoy their upward momentum as liquidity remains well on the equities market with investors capitalising on the positive market sentiment.

India’s move to reduce the import duty for crude palm oil (CPO) bodes well for the plantation sector as CPO prices remain firm above RM3,300/metric tonne. Meanwhile, we continue to like the construction sector as a prime beneficiary under Budget 2021 as construction activities shift into higher gear.

The FBM KLCI gapped up to hover in the positive territory as the key index formed a bullish harami candle to recover most of its previous session losses.

With the key index now back above the daily EMA9 level as well as the 1,600 psychological level, we think that further upsides will be on the table towards the next resistance at 1,615 followed by 1,640. Meanwhile, the supports are at 1,560, followed by 1,540.

Inter-Pacific Research

It was a day of recovery on Bursa Malaysia with the key index performing much stronger-than-expected as it almost recouped all its previous day’s losses on bargain hunting activities.

The buying was widespread with winning stocks being comfortably ahead of losing stocks. The Malaysian equities’ rebound was also due in part to the revival of regional equities that was fuelled by optimism over the potentially firmer economic conditions in 2021.

As we have noted, the underlying market environment is improving, riding on the confidence over the availability of COVID-19 vaccines soon that could also potentially lead to an improved economic recovery in 2021.

This is likely to remain the central theme for the market’s sustained upsides over the near term and to also cast aside the increasingly toppish valuations following the key index’s 10% gain over the past month.

Although we see sustained upsides, we also think there could be bouts of quick profit taking actions after yesterday’s strong gains that may slow the key index’s near term ascend.

As such, we think that the 1,616 level – which is also its most recent high – will be the key hurdle for now. If the level is cleared, however, the next targets are at 1,620 and 1,626 points respectively. The supports, meanwhile, are at 1,600 and 1,590 respectively. – Dec 2, 2020

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