BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was mild bargain hunting to help the FBM KLCI end last Friday relatively unchanged after a downward week.
For most of the day, the key index was in the negative territory in tandem with the weakness in global equities but an end of day uplift enabled it to close near the breakeven point.
Nevertheless, market conditions stayed dour with losers still ahead of gainers and many lower liners and broader market shares giving back some of its gains in thin volumes that was less than 3.0 billion shares.
The near-term outlook is likely to stay insipid, affected by the global equity sell-off at the end of last week that will continue to leave the FBM KLCI in a state of flux.
Concerns over fiscal tightening and higher interest rates will keep the market guarded as well as preserve the cautious trend at the start of the week that is likely to keep most market players at the sidelines.
This also means that the downward trend is likely to be sustained with the key index poised to re-test the 1,520 support. If this level is breached, the supports are lowered to 1,515-1,517 points and 1,510 respectively.
The hurdles, on the other hand, are at 1,530 and 1,535 points respectively.
Malacca Securities Research
The FBM KLCI ended marginally lower on Friday as negative sentiment persisted throughout the week in line with the regional downtrend movements.
With Nasdaq being pressured in the recent sessions into the oversold region, we believe investors cherry pick selected big technology names in the local front for short term bargain hunting activities.
Meanwhile, the upcoming FOMC meeting on Wednesday (Jan 26) will be a crucial for investors to judge the speed of rate hikes going forward.
Commodities-wise, crude palm oil (CPO) price has increased to all-time-high zone while crude oil is holding strong above the US$85/barrel level.
The FBM KLCI posted its fifth session of losses as the key index remained below the daily EMA60 level. Technical indicators remained negative as the MACD Histogram has extended a negative bar while the RSI continued hovering below the 50 level.
As the benchmark index has breached the support of 1,530 level, the FBM KLCI may be dragged to its next support at 1,505 while the resistance is located at 1,570. – Jan 24, 2021
