BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Profit taking came to the fore yesterday in tandem with the weakness in regional indices.
At the same time, glove maker stocks succumbed to another round of sell-off following Supermax’s export ban into the US.
Banking and energy stocks were among the big losers as they retreated following their recent strong gains.
With profit taking being widespread, market breadth was decidedly negative with losers more-than-double the gainers and traded volumes slipped below the four billion mark.
The retreat was steeper-than-expected with profit taking becoming more pronounced as the day wore one.
However, the market’s undertone remains firm due to the easing pandemic conditions that is set to buoy the country’s economic prospects in the last quarter of the year.
As such, we think that the market will attempt to strengthen its position around the 1,590 level where it has found support and it could also serve as a springboard for a firmer rebound back above the 1,600 level.
While we expect the FBM KLCI to regain some ground over the near term, the upsides could still be measured due to the slightly overbought conditions and fewer compelling buying opportunities.
Therefore, the 1,600 level remains the immediate hurdle followed by the 1,610 level. Meanwhile, the supports are at 1,580 and 1,572 points respectively.
Malacca Securities Research
The FBM KLCI languished in the negative territory for almost the entire trading session and closed lower, snapping its three-day winning streak as profit taking activities emerged.
Given the mixed Wall Street performances, coupled with Evergrande’s issues, we expect market sentiment to remain negative today.
However, we expect traders or investors to focus on sectors that are related to the upcoming Budget 2022 as they may provide clarity for the economic recovery going forward.
Commodities-wise, both crude palm oil (CPO) and crude oil prices declined after a significant extended rally in both commodities over the past weeks.
The FBM KLCI pulled back below the psychological 1,600 level as the key index took a breather after three winning sessions.
Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI has hooked lower below the 70 level.
Resistance is pegged along 1,600-1,620, while support is located at 1,580. – Oct 22, 2021
