BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Although global equities were spooked by fresh geopolitical concerns, the FBM KLCI bucked the weakness trend to head higher at the start of the week.
Once again, banking, plantation, and oil & gas (O&G) stocks were chased up on strong commodity prices with foreign buyers dominating trades.
The lower liners and broader market shares, however, succumbed to fresh profit taking that caused losers to beat gainers for the day. Meanwhile, traded volumes were little changed at the start of the week.
With crude oil and palm oil prices making gains over the past few days, interest in these stocks is likely to continue and should also keep these stocks buoyant despite many of them approaching overbought levels.
As a result, the key index is likely to hold up for longer even as it is also at toppish levels as there will still be some nibbling on some of these stocks.
However, further gains could be more modest with profit taking punctuating the upsides as the FBM KLCI becomes increasingly toppish. At the same time, trading on other component stocks could become more cautious due to the already toppish conditions.
As such, the 1,590 level may become a formidable level to clear for now. In the interim, there is a hurdle at 1,587 points while the 1,580 level is the immediate support followed by the 1,570 level.
Malacca Securities Research
Once again, the FBM KLCI managed to outperform after coming off from its session lows. Given the sharp gains, the key index is now looking increasingly toppish and may warrant for a consolidation over the near term.
At the same time, the lower liners are also experiencing bouts of profit taking after enjoying a good run over recent weeks.
While we think that the potential pull-back is healthy to allow gains to be digested; volatility will still remain a feature as investors are uncertain on the interest rate direction albeit the US Fed is now less hawkish after the meeting yesterday.
The FBM KLCI chalked up mild gains as the key index surpassed the immediate resistance of 1,580.
Technical indicators were positive as the MACD remained above the zero level while the RSI has crept towards marginally below the overbought position.
The next resistances are located at the 1,600-1,620 while support is now set around 1,550 followed by 1,525. – Feb 15, 2022
