BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index slipped slightly to end the week on a weaker note. However, index heavyweights held up for the most part, boosted by buying support on plantation stocks that shored-up the FBM KLCI and to counter concerns over the Russia-Ukraine dispute.
Conditions elsewhere, however, were mixed as prevailing profit taking activities resulted in market breadth turning negative. Traded volumes were little changed from a day earlier.
The FBM KLCI is likely to hold steady despite its overbought conditions as there remains rotational buying among index heavyweights that would help to keep it close to the 1,600 level for the being.
This could also allow it to cast aside concerns over the uncertain geopolitical outlook in Eastern Europe as well as to allow the key index to build up a base around the above psychological level.
The high palm oil prices are expected to prolong the rally among plantation stocks, and this would provide support to the key index to stay afloat as there are also few signs of an impending consolidation as yet.
However, there could be increased volatility amid the toppish market conditions that could limit the upside moves.
As such, the immediate hurdle at 1,608 points may prove to be formidable for the time being followed by the 1,615 level. Below 1,600, there is support at the 1,590-1,595 levels.
Malacca Securities Research
Buying momentum fizzled on the FBM KLCI in line with most of its regional peers last Friday following the slump on Wall Street amid the ongoing tension between Ukraine and Russia.
Hence, with the negative sentiment that took place on Wall Street, we expect local technology counters to continue underperforming the broader market.
Investors may turn their heads to commodities-related or consumer stocks over the near term as commodity prices remains elevated at this juncture.
Crude palm oil (CPO) prices are hovering above the RM5,500/metric tonne level while Brent oil price is trading above the US$90/barrel mark.
The FBM KLCI snapped its seven-session gains but the key index managed to stay above the 1,600 psychological level. Technical indicators are positive but could be extended as the MACD is above the zero level while the RSI is in the overbought region.
Resistance is pegged around 1,620-1,640, while the support is set at 1,570-1,580. – Feb 21, 2022
