BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities were broadly lower yesterday, pushed back by uncertainties over the status of Budget 2021 as well as rising COVID-19 cases at Top Glove’s factories that affected sentiments.
The pushback was also seen as severe with losers overwhelming gainers on a 4-to-1 ratio amid the widespread selling that extended to the broader market and lower liners with several speculative counters enduring sharp falls after their recent outperformance.
The uncertainties over Budget 2021 could continue to dampen sentiments over the near term with the vote on the Budget possibly delayed, casting further doubts on the government’s position.
However, we think there could some near-term reprieve as we see some bouts of mild bargain hunting actions emerging after yesterday’s steep falls. This could provide some cushion against further falls, but overall market conditions would remain guarded as worries over the spiking COVID-19 cases may leave sentiments tattered for longer.
The mild reprieve could provide a near-term liftto the FBM KLCI back to above the 1,580 level and possibly to around the 1,585 level which is followed by the 1,590 level.
On the downside, there are supports at the 1,567 and 1,550 levels respectively.
Hong Leong Investment Bank Research
Although overnight Dow’s strong record closing and a 3.9% rally in Brent oil price may provide a fillip to local bourse today, any technical rebound is likely to be capped near the 1,600-1,618 zones amid grossly overbought technical readings, lingering concerns over extended conditional movement control order and protracted economic damage to Malaysia following unabated surge in COVID-19 cases and the Budget 2021 approval on Nov 26.
Following a 126-ploint relief rebound from 1,452 low, the FBM KLCI is expected to lock in profit taking consolidation in the short term to neutralise its excessive overbought momentum.
Unless swiftly reclaiming above the 10-day SMA near 1,591 after yesterday’s 19-point slide, the benchmark is envisaged to retrace further towards 1,555-1,535 support levels before staging a technical rebound. Key resistances are situated at 1,591-1600-1,618.
A successful breakout above these barriers would likely signal better days ahead with more upside targets at 1,640 and 1,669 zones. – Nov 25, 2020
