BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Profit taking remained prevalent on Malaysian equities last Friday as the key index ended the week virtually unchanged from a week ago.
The broad market environment remains insipid with buying interest remaining absent and the total trades of some 3 billion shares were among the lowest year-to-date (YTD).
The lower liners and broader market shares indices also remained mixed, but market breadth stayed negative as losers still overwhelm gainers by a wide margin.
After breaching the psychological 1,600 level last week, the key index has failed to hold on to the gains in quick profit taking actions to leave the key index in a drifting mode again.
What is more telling is the lack of follow-through buying despite the easing pandemic conditions and the improved economic outlook that has instead left the FBM KLCI on the downtrend.
With the wait-and-see approach looking to continue ahead of the Budget 2020 announcement at the end of the week, the sideway trend is likely to prevail for the time being.
There should still be bouts of support to keep the key index above the 1,580 level but with fresh buying largely absent, the near-term target remains at the 1,600 level which may also prove to be a significant hurdle for the key index to clear for the time being.
The other support and resistance levels are at 1,575 and 1,595 points respectively.
Malacca Securities Research
The FBM KLCI closed lower on Friday amid lacklustre trading interest as investors remained on the tenterhooks ahead of the Budget 2022.
The local bourse may continue to trade sideways for the week amid dearth of fresh lead while investors awaiting more details on Budget 2022 to be tabled on Friday (Oct 29).
Meanwhile, the recovery theme sectors might gain momentum as bargain hunting activities may emerge on the back of brighter economic prospects.
Commodities-wise, crude palm oil (CPO) price staged a pullback, while crude oil price held above the US$85/barrel mark.
The FBM KLCI pulled back further from the 1,600 psychological level as the key index closed around its daily EMA 9 level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI hovering above the 50 level, showing some overbought signal.
Resistance is located at 1,600 while the support is pegged along 1,580. – Oct 25, 2021
