BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Profit taking was prevalent yesterday in tandem with regional equity market weakness that also undid most of the window dressing gains from last Friday.
As a result, the FBM KLCI slipped back below the 1,500 level with many lower liners and broader market shares on the retreat again.
Expectedly, market breadth turned negative with losers more than double the number of gainers while traded volumes slipping to less than 2.5 billion shares amid the low market participation.
There appears to be little reprieve with the near-term market outlook to stay dour, affected by the weak equity market sentiments as well as lack of leads.
Therefore, the downside risk could prompt further profit taking activities while we are of the opinion that window dressing activities are winding down.
Moreover, spooked by the rising Omicron cases and new movement restrictions, overseas equity markets are also unable to provide much impetus to local stocks to stage a comeback.
As such, the key index is likely to drift lower over the near term with the 1,490 level in play. If it gives way, the next support is at the 1,480 level.
On the flipside, the 1,500 level is the immediate resistance followed by the 1,507 level.
Malacca Securities Research
The FBM KLCI retreated in tandem with regional bourses amid concerns over spread of the COVID-19 Omicron variant.
Tracking the overnight negative performance on Wall Street, selling pressure may extend towards stocks on the local bourse.
Although data suggested that Omicron is not as deadly as Delta variant, governments across the world could be monitoring for further actions such as lockdown and deployment of tighter quarantining standard operating procedures (SOPs) in the near term.
However, we may still anticipate mild year-end window dressing activities on the local front.
On the commodity markets, crude oil price declined but hovering above US$71/barrel while crude palm oil (CPO) traded around RM4,300/metric tonne.
The FBM KLCI snapped its three-session winning streak to break below the key 1,500 level, closing near the daily EMA9 level. Technical indicators remained mixed as the MACD Histogram has extended a positive bar while the RSI hovered below the 50 level.
The next support level is located at 1,475 while the resistance is pegged along 1,505-1,535. – Dec 21, 2021
