Below are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malacca Securities Research
It was another firm performance on the local bourse despite a choppy trading session yesterday. We reckon that gains would likely to extend for the FBM KLCI to power beyond the 1,600 psychological level owing to the positive progress over the COVID-19 vaccine development from Moderna.
At the same time, gains will be backed by the positive momentum on Wall Street overnight, coupled with expectations that the economy will continue to deliver a quicker-than-expected recovery. We also think that the lower liners may continue their upbeat momentum, spurred by the liquidity driven market.
Sector focus: The Regional Comprehensive Economic Partnership (RCEP) is expected to boost the transportation & logistics sector. We continue to favour the technology sector that remains on track for further upside owing to positive outlook, while the energy sector may take cue from the higher crude oil prices.
With the positive momentum has yet to demonstrate any signs of reversal, we expect the extended gains to boost the local bourse towards the next resistances at 1,615-1,645.
Immediate support is pegged at 1,570, followed by 1,540. Indicators remained positive as the MACD Histogram has extended another green bar but the RSI is overbought.
JF Apex Securities Research
The Dow Jones Industrial Average and S&P 500 posted all-time closing highs after Moderna released trial data showing its coronavirus vaccine was more than 94% effective, further raising hopes of economic recovery.
This was followed by Pfizer and BioNTech’s positive announcement last week.
Similarly, the pan-European Stoxx 600 closed up by 1.3% provisionally, with the oil and gas (O&G) stocks led the gains as market sentiment was boosted by positive news from Moderna.
On the local market, the FBM KLCI gained 9.97 points or 0.63% to 1,599.66 points. Following the positive tone posted by the overseas markets, the local benchmark index is expected to continue its upward momentum with a resistance level of 1,615 points.
Cyclical stocks play or recovery theme such as banking, gaming, aviation, O&G are continued to be under investor interest, while glove and technology could be subject to selling pressure. – Nov 17, 2020
