What to expect on Bursa Malaysia this Thursday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

There was no reprieve for stocks on Bursa Malaysia as many continue to head south in tandem with the sell-off on key global indices, sending the key index to the 1,530 support level.

The selling was widespread with most stocks closing lower in a flight to safety that resulted in losers being ahead of gainers on a 3-to-1 ratio.

Technology stocks were again the main losers – following the lead on Nasdaq – but energy stocks bucked the sell-down as oil prices jumped to its highest level in seven years.

There is no change to the near-term outlook as continuing weakness in most global equity markets will also keep sentiments on Bursa Malaysia on the weak side for longer.

Key concerns over the potentially faster pace of tapering and the unresolved pandemic conditions will also keep market conditions guarded for longer.

Although the downside bias also looks to persist following the sustained downtrend in key overseas indices overnight, we think the selling could be abating following the key index’s steep falls over the past few sessions that is approaching an overdone level.

The key index should be attempting to find some support at the 1,520 level as it looks for some stability but if that is breached, the next support is at 1,516 points.

The resistances, meanwhile, are at 1,535 and 1,540 points respectively.

Malacca Securities Research

Persistent selling pressure in the banking heavyweights dragged the key index to its third declining session.

We expect local sentiment to remain sour over the near term, especially on technology stocks following the choppy session on Wall Street overnight as investors continued to brace for inflation battles and sentiment may stay volatile ahead of the Federal Open Market Committee (FOMC) meeting next week.

On the other hand, commodity prices have remained strong with crude oil price traded above the US$88/barrel mark while crude palm oil (CPO) price was firmer, driven by expectation for export growth as the Indonesian Government intends to limit its palm oil exports.

The FBM KLCI marked the third consecutive session of losses with the key index falling below the daily EMA 60 and SMA 100 level. Technical indicators turned negative as the MACD Histogram was flat while the RSI fell below the 50 level.

Traders may watch out if the key support at 1,530 holds. Next support is located at 1,505 while the resistance is envisaged at 1,570 – Jan 20, 2022

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