What to expect on Bursa Malaysia today

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

Inter-Pacific Research

The key index retreated further yesterday, giving up all its intraday gains on quick profit taking actions, particularly on glove maker stocks as overall market confidence remains thin.

However, the lower liners and broader market shares mounted a quick rebound on bargain hunting activities that helped them to recoup some of the previous day’s losses.

Traded volumes also fell but there were more gainers than losers for the day.

It remains a two-speed market with the heavyweights still finding it difficult to get out of the first gear, while the broader market shares were still steaming ahead.

With lingering concerns over the pandemic and its effect on the economy and corporate earnings in 1Q 2021, sentiments are likely to stay morbid for now, in our view.

In addition, the lack of confidence would also keep many market players away and coupled with fewer noteworthy leads, we expect the FBM KLCI’s drifting mode to extend over the near term.

The downside bias could also see the key index potentially retreating to the 1,550 level where we see strong support emerging.

The interim support is at around the 1,565 level while the resistances are at 1,580 and 1,590 points respectively.

Malacca Securities Research

In tandem with the regional peers, the FBM KLCI inched lower due to heavy selling in glove heavyweights and Petronas-related counters.

There is still growing concerns over the still-rising COVID-19 cases that may contribute to the potential extension of movement control order (MCO 2.0) albeit with some relaxation in the standard operating procedures (SOP).

Hence, it may limit the upside potential on the key index over the near term until the vaccine rollout.

Nevertheless, we expect some bargain hunting activities to emerge in the near term on high certainty sectors ahead of the February reporting season.

The FBM KLCI extended its losing streak for another session, contributing to an eight-day losing streak.

Indicators remained negative as the MACD Histogram has extended another red, while the RSI remains below 50.

The FBM KLCI’s support will be set around 1,550-1,560, while resistance will be pegged along 1,600-1,610. – Jan 27, 2021

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