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

Malaysian equities gave up its Friday gains as profit taking/selling activities made a quick return to leave the key index at its lowest level in nearly a month amid escalating foreign selling.

The selling was most pronounced on glove maker stocks ahead of the start of the country’s COVID-19 vaccination programme and was further compounded by a sell-down on banking stocks.

The selling was also widespread with most stocks closing in the red, resulting from most of the lower liners and broader market shares succumbing to bouts of profit taking.

Our anticipated follow through buying support failed to materialise yesterday with the return of quick profit taking actions that blunted the recovery and kept the key index on a downward trend.

This is also leaving market conditions frayed and the market’s weakness is looking to prolong.

The market’s weakness has also put shade to the prospects of firmer economic and corporate earnings recovery with the vaccine availability.

Under the prevailing environment, the odds for further near-term weakness are still present due to the lack of buying catalysts, albeit we do not rule out some minor bounce after the regulators extended the suspension of intraday short selling for another six months that could lessen some of the selling pressure on equities.

On the downside, the supports are now at 1,566 points and the recent low of 1,560 points. The supports, on the other hand, are placed at 1,580 and 1,590 points respectively.

Malacca Securities Research

Selling pressure in glove heavyweights was triggered as COVID-19 could come to an end with the arrival of COVID-19 vaccine.

Despite selling activities on Wall Street overnight, we believe there could be some fresh buying support given the IDSS and PDT short sale have been extended for another 6 months.

We believe traders may be on the look-out for bashed down stocks yesterday. Also, we observed that the Brent oil price has climbed strongly overnight above US$65/barrel.

The FBM KLCI saw a pullback to close below the EMA120 level yesterday, forming a bearish engulfing candle.

Technical indicators remained negative as the MACD Histogram has extended another red bar, while the RSI hovers below 50.

We expect the key index to continue trading sideways, with support pegged around 1,550, and resistance located around 1,590-1,600. – Feb 23, 2021

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