BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysia equities took a dive on Friday following weakness on key global indices the night before on concerns that the US Federal Reserve’s tapering will be more aggressive to combat inflation.
As a result, selling took hold with most index-linked stock losing ground while technology stocks took the brunt of the sell-down.
Other lower liners and broader market shares were also not spared amid renewed weakness that resulted in market breadth becoming overwhelmingly negative.
Although the market’s undertone remains cautious, the key index could be attempting to find some stability after last Friday’s sell-down.
At the same time, there could still be volatility with much of the market’s direction to be dictated by overseas leads as domestic impetuses are far and in-between even as the country’s economic fundamentals are likely to stay relatively firm for the time being.
This could prompt some bargain hunting actions but with most market players still wary of the market’s near-term direction, there could still be bouts of choppiness that may temper its attempts to find stability.
For now, the 1,550 level remains the main support followed by 1,543 points. On the other hand, the resistances are at 1,561 and 1,569 points respectively.
Malacca Securities Research
Sentiment was broadly negative on the local bourse last Friday, taking cues from both the global and regional stock markets.
Sell-off deepened in technology stocks as concerns over interest rate hikes in the US and overstretched valuations continued to put pressure on the sector.
However, given the mild rebound in Nasdaq, we believe technology stocks may perform a technical rebound move at least in the near term.
Investors may also focus on China’s economic data such as the 4Q 2021 gross domestic product (GDP) and unemployment rate to be released today as well as Bank Negara Malaysia’s interest rate decision this week.
Commodities-wise, crude palm oil (CPO) price fell below RM5,000 while crude oil price extended its uptrend move.
The FBM KLCI traded in the negative territory for the entire session but managed to hold above the SMA200 and daily EMA9 level. Technical indicators, however, are still positive with MACD Histogram extending another positive bar while the RSI is above 50.
Key support is located at 1,530 while the resistance is pegged at 1,580. – Jan 17, 2022
