BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Rising Russia-Ukraine tensions resulted in sentiments turning weaker with profit taking on some of recent big movers continuing to leave the FBM KLCI on a downtrend.
Nevertheless, there were mild bargain hunting on selected heavyweights that cushioned the key index’s losses.
The broader market, however, was a sea of red as the selling escalated with technology and transportation & logistic stocks being the biggest losers. Expectedly, losers overwhelmed gainers by nearly a 3-to-1 ratio.
The near-term outlook will continue to be dictated by the geopolitical events in Eastern Europe and with the conditions turning more uncertain, the FBM KLCI is likely to see further near-term weakness.
Market players are likely to remain vigilant and will be cautious in their buying decisions that could leave stocks to drift further with profit taking activities looking to dominate trading again amid the wait-and-see stance.
Still, selling may be mild as there appears to be pockets of buying support on some index heavyweights like plantation and oil & gas (O&G) stocks due to the prevailing high commodity prices.
This could cushion the key index’s near-term downtrend to the 1,570 level but if it gives way, the next support is located at 1,563 points. Meanwhile, the hurdles are at the 1,580-1,583 levels and 1,590 points respectively.
Malacca Securities Research
With the negative sentiment persisted across the regional markets on the back of escalating tensions from Ukraine and Russia, the FBM KLCI continued to trend lower by reversing the rally in the past week.
We believe market will trade in heightened volatility that may persist at least in the near term following another sell-off on Wall Street overnight due to fears over Russia’s decision to move troops into eastern Ukraine.
Meanwhile, investors may keep an eye on Malaysia’s inflation rate which will be released tomorrow (Feb 24).
The FBM KLCI dipped further from the daily EMA9 level and breached the immediate support at 1,580. Technical indicators, however, remained positive as the MACD stayed above the zero level while the RSI remained above the 50 level.
Resistance is located around 1,600-1,620 while the support is now set at 1,570. – Feb 23, 2022
