BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities saw significant profit taking at the start of the week with the key index diving below the psychological 1,600 level to settle at the 1,580 support.
Recent big movers like plantation and banking stocks were among the biggest losers. This trend also extended to the broader market which turned warier due to the ongoing Russia-Ukraine dispute.
Consequently, losers more than double the number of gainers due to increased selling pressure.
The near-term outlook remains unsettled as market conditions are looking increasingly cautious after the local bourse extended it upward streak that has left it overbought.
Although the key index could still attempt to find support around the 1,580 level after yesterday’s fall, fresh buying may still be modest as the overbought conditions could leave the key index to consolidate further.
Furthermore, the lingering geopolitical concerns will continue to weigh on sentiments that could further curtail bargain hunting activities with market players awaiting for more clarity in the market.
Therefore, the pullback looks to continue over the near term that could see the FBM KLCI retreating to the 1,570 level.
If this level is breached, the next support is pegged at 1,565 points while the resistances are at 1,587 and 1,595 points respectively.
Malacca Securities Research
The FBM KLCI extended loses along with the regional peers amid escalating geopolitical tensions between Ukraine and Russian and plantation stocks tumbled after their 10-session rally while technology counters noticed further selling pressure.
With the ongoing geopolitical tension, we believe the negative sentiment will persist. However, given the recent inflow of foreign funds, coupled with the firm commodity prices in crude oil and crude palm oil (CPO), we expect the plantation and oil & gas (O&G) sectors will be supported over the near term.
The FBM KLCI inched down below the 1,600 psychological level, closing just around the daily EMA9 level. Technical indicators, however, turned slightly negative as the MACD Histogram retraced while the RSI slid from the overbought zone.
Resistance is pegged around 1,620-1,640 while the support is set at 1,570-1,580. – Feb 22, 2022
