What to expect on Bursa Malaysia this Wednesday
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 continues to lose ground on profit taking following last week’s window dressing activities.
Its pullback also bucked the uptrend in many regional indices at the start of the year. However, there were sustained buying interest among the lower liners and broader market shares as participants gradually return to equities after the year-end lull.
As a result, market breadth remained positive while traded volumes climbed back above the 3 billion shares mark.
Conditions among index heavyweights remain largely indifferent with the follow through buying still lacking to allow the FBM KLCI to convincingly pass the 1,550 level.
As a result, near-term conditions could stay choppy due to the continuing lack of fresh buying impetus even as valuations remain compelling on some of the index heavyweights.
As it is, there is still lingering concerns over the country’s economic recovery prospects in light of the pandemic conditions and adverse weather with market players still adjusting to higher transaction cost.
Nevertheless, the key index could be looking to find some measure of stability after the profit taking streak over the past two sessions.
Mild bargain hunting could emerge that may allow the key index to find support around the 1,540 level. If this level fails to hold, the next support is at the 1,535 level.
On the upside, the immediate hurdle is the 1,550 level followed by the 1,560 level.
Malacca Securities Research
The FBM KLCI dipped for the second consecutive session as investors shifted their focus to lower liners in view of searching for alpha investment during the early days.
While the local exchange may extend its positive sentiment, the upside may be limited tracking the mixed sentiment on Wall Street.
Also, investors may stay cautious given that the multiple rate hikes in 2022 are on the cards.
On the commodities market, crude oil price hovered around US$80/barrel mark as OPEC+ decision to stick to its planned increase of oil output in February eased concerns over a surplus in 1Q 2022. Meanwhile, crude palm oil (CPO) price trended firmly above the RM4,900/metric tonne level.
The FBM KLCI (-0.5%) pulled back for the second session and the key index remained below the SMA200 level. Technical indicators, howeve,r were positive as the MACD Histogram has extended a positive bar while the RSI is above 50.
The support level is located at 1,530 while the resistance is pegged along 1,560. – Jan 5, 2022
