BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI posted a firm rebound yesterday with the recovery buoyed by gains in overseas indices that cast aside the Omicron concerns.
Much of the gains were attained in the afternoon session with most index heavyweights regaining some traction on bargain hunting actions.
This helped traded volumes to climb above the 4.0 billion mark with gainers outpacing losers on a 2-to-1 ratio. Most of the lower liners also regained ground amid the improved market undertone.
The near-term outlook is likely to stay upbeat with the sustained gains on key overseas indices to continue fuelling the FBM KLCI’s recovery from an oversold position.
This could also provide an impetus for the year-end window dressing activities to continue, thus putting the ongoing Omicron, fiscal tightening and concerns over potential debt defaults among China’s property developers in the backburner for now.
However, the upsides could also be met by quick profit taking actions as traders could opt to close out some of their profitable positions even as the sustained gains should see the psychological 1,500 level cleared again.
Beyond that level, the FBM KLCI’s next targets are at 1,507-1,510 points and the 1,520 level. On the downside, the supports are at 1,493 and 1,483 points respectively.
Malacca Securities Research
The FBM KLCI rebounded from Omicron-induced sell-off earlier, led by banking heavyweights and window dressing activities that might have taken off.
We reckon the overnight rally at Wall Street may spill over to the local bourse amid fading concerns over the COVID-19 Omicron variant.
Besides, the market may keep an eye on China’s economic data (inflation and producer price index) which will be released on Thursday.
On the local front, news that the Government will be deciding on the 5G wholesale model by January 2022 while aiming to reach 80% of populated areas with 5G roll-out may benefit the telecommunication sector.
Commodities-wise, crude oil price advanced to close above the US$75/barrel mark while crude palm oil (CPO) price extended gains.
The FBM KLCI rebounded, but still hovering below the critical 1,500 level. Technical indicators are mixed at this juncture as the MACD Histogram has extended a negative bar while the RSI has hooked above 30 (oversold) level.
The support level is located at 1,480 while the next resistance is pegged along 1,500-1,520. – Dec 8, 2021
