BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Window dressing activities which dominated trading last Friday allowed the key index to end the week above the 1,500 points level with healthcare and plantation stocks among the main movers for the day.
However, the gains were attained on low volumes with most market players remaining on the sidelines while support mainly came from local players as foreign funds were still net sellers.
Market breadth was also slightly negative as lower liners stayed relatively subdued for the day.
Despite Friday’s gains, the market’s undertone remains cautious with the Omicron concerns and still slow earnings growth outlook to continue keeping most market players on the sidelines.
At the same time, the window dressing activities could be winding down ahead of the year end and this may leave the key index to drift again.
In the interim, there could be quick profit taking actions after last Friday’s surge that could send the key index below the 1,500 level again.
Buying support could also wane following Friday’s weakness among key global equity indices that were spooked by the closure mandates in some European countries over the resurgent pandemic conditions.
If the FBM KLCI slips below the 1,500 support, the ensuing support is at 1,491 points. The hurdles, on the other hand, are at the 1,507-1,510 levels.
Malacca Securities Research
The FBM KLCI extended its gains for the third session as selected heavyweights were lifted on the back of FTSE rebalancing activities.
However, we expect some pullback on the local equities given the Wall Street fell significantly last Friday over rising COVID-19 Omicron cases as well as more hawkish monetary policies going forward.
Meanwhile, investors may keep an eye on Malaysia’s inflation rate which is scheduled to be released this week.
Commodities-wise, crude oil price declined but hovered above the US$73/barrel mark while crude palm oil (CPO) price is trading above RM4,400.
The FBM KLCI rallied to close above the critical 1,500 level and the daily EMA9 level. Technical indicators have turned slightly positive as the MACD Histogram has extended a positive bar while the RSI is spiking higher towards 50.
The support level is located at 1,500 while the resistance is pegged along 1,520-1,535. – Dec 20, 2021
