BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities rebounded yesterday after the market was sent lower on the emergence of a new COVID-19 variant.
The key index was quick off the blocks, jumping close to the 1,520 level but gave up much of its intraday bargain hunting gains at the end of the session as profit taking, particularly from foreign funds, took hold.
Market participation remained brisk with nearly six billion shares traded, but gainers were only marginally ahead of losers as many lower liners also gave up their intraday gains.
Concerns over the Omicron COVID-19 variant will continue to dictate the market’s movements and with a vaccine manufacturer indicating that its vaccine could be less effective against the Omicron variant, there will still be considerable wariness over the near-term outlook.
At the same time, the Fed has hinted that it will start its tapering sooner-than-expected given that inflationary pressures are likely to stay elevated and this could further keep sentiments further in check.
Consequently, conditions on the FBM KLCI are also likely to turn wary again as it could succumb to a new bout of selling with market players again retreating to the sidelines until there is fresh clarity on the market’s direction.
The renewed selling could also threaten the 1,500-support level and if it gives way, the next support is pegged at the 1,490 level.
On the other hand, the hurdles are at 1,520 and 1,530 points respectively.
Malacca Securities Research
The FBM KLCI rebounded, bucking the negative momentum across the regional markets as bargain hunting activities emerged after five sessions of sell-down.
However, tracking the overnight significant losses on Wall Street, the upside may be limited as our local market may remain volatile amid concerns over development surrounding the COVID-19 Omicron variant.
Nevertheless, some investors may take advantage to add positions into glove companies.
On oil prices, a report by Reuters noted a slower pace of supply increases from OPEC+ in November but OPEC+ expects an oversupply situation of global oil in 1Q 2022, prompting crude oil to plunge more than 5%. Meanwhile, crude palm oil (CPO) price declined 4%.
The FBM KLCI rebounded amid high trading volume but failed to close above the daily EMA9 level. Technical indicators remained negative as the MACD Histogram has extended a negative bar while the RSI hovered below the 50 level.
The support level is located at 1,500 while the next resistance is pegged along 1,535-1,560. – Dec 1, 2021
