BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was a strong run-up on the FBM KLCI yesterday that pushed it past the psychological 1,550 level.
Much of the gains emanated from strong foreign buying interest on the index heavyweights that also helped it to cast aside concerns over the rising domestic COVID-19 cases.
The positivity was also felt in the broader market with gainers being comfortably ahead of losers amid fresh buying that lifted total trades to nearly 3 billion shares for the day.
The near-term outlook is likely to remain sanguine amid the continuing recovery of global equities from their early year taper tantrum.
At the same time, there continues to be further reshuffling of portfolios that could help to sustain the buying interest, particularly from foreign funds that have been net buyers of late, while higher commodity prices could also be a boon to oil & gas (O&G) and plantation stocks.
Meanwhile, the impending re-opening of the country’s borders should further boost interest in travel-related stocks over the near term.
Although the upsides look to sustain, there could also be choppiness with quick profit taking activities possibly tempering some fresh buying in the early part of the trading session.
If stability is found, however, the key index could re-challenge the 1,555 level followed by the 1,560 level. On the downside, the 1,550 level is the immediate support followed by 1,542 points.
Malacca Securities Research
We believe that the local bourse may attempt to build onto yesterday’s gains by capitalising on the recovery mode on the back of the robust retail sales data for December 2021 which is at a record high of RM120.5 bil (+3.5% year-on-year).
Still, cautiousness may prevail ahead of the US inflationary data scheduled to be released tonight. Also, we think that the lower liners may see extended rotational play on the back of the positive market undertone.
At the same time, the liquidity driven market that is seeing signs of recovery is a boon for pockets of opportunities over the interim period.
The FBM KLCI advanced sharply to breakout above the 1,545 resistance level as the key index climbed to close above the daily SMA 200 level. Technical indicators remained positive as the MACD remained above the zero level while the RSI solidifies its position above 50.
The immediate resistances are now located at the 1,570-1,580 while support is set around 1,525 followed by 1,500. – Feb 10, 2022
