BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malacca Securities Research:
Signs of profit taking activities are emerging on the FBM KLCI following the key index breakthrough above the 1,600 psychological level. We now expect a consolidation to take place as investors digest their recent gains.
The sideways trend is expected to allow fresh legs for further upside over the near term. In the meantime, the lower liners are expected to consolidate as well with the investors focusing on the barrage of corporate earnings releases.
The FBM KLCI was traded largely in the negative territory as the key index remained close above the daily EMA9 level. A consolidation is expected to take place with immediate resistances at 1,615, followed by 1,645. Immediate support is pegged at 1,570, followed by 1,540.
Inter-Pacific Research
Malaysian equities retreated yesterday amid its overbought conditions following the FBM KLCI’s 10% surge over the past two-week, riding on optimism of the strong efficacy of COVID-19 vaccines in development.
However, the pullback was seen to be mild and this is still leaving the overall market conditions toppish.
With the toppish conditions still prevailing, however, we think the consolidation spell is likely to continue over the near-term.
We see profit taking activities potentially accelerating in tandem with the overnight weakness on Wall Street (the Dow Industrial Average slipped 344.93 points to 29,438.42) as concerns over the escalating COVID-19 cases globally taking centre stage again even as the vaccines may prove to be effective in trials as mass inoculation is still some six to eight months away.
We also note that a pullback will be healthy to allow some of the recent gains to be absorbed, albeit we do not think that the pullback will be sharp as there remains some pockets of support.
Therefore, we continue to see the 1,600-points level serving as the immediate support, followed by the 1,587 level. The resistances, meanwhile, are at 1,611 – the year’s high – and at 1,621 points respectively. – Nov 19, 2020
