BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The selling pressure on the FBM KLCI eased on Wednesday following an extended session of profit taking over the past few sessions. This follows the US Congress passing a last minute COVID-19 relief bill ahead of the Christmas holiday celebrations.
The broader market also tracked the Main Board, closing with gains yesterday.
Moving forward, uncertainties surrounding the new strain of the COVID-19 virus and its resistance towards existing vaccines is likely to put a downward pressure on the global and local markets but there should be further near-term revival ahead of the Christmas break as bouts of bargain hunting re-appear.
Still, we think market following will be thinner due to the over-riding pandemic concerns and this could limit the gains.
Key index support level at 1,631 appears to be resilient for now, while the next supports will be at the 1,620-1,605 levels respectively. The 1,660 level is now the immediate hurdle, followed by 1,670 points.
Malacca Securities Research
We expect the positive momentum on the local front to sustain today ahead of the long weekend.
We believe market participants are still expecting news flow on the Kuala Lumpur-Singapore High Speed Rail (HSR) as well as the Large Scale Solar 4 (LSS4) contracts to surface in the news media in the near term.
Meanwhile, crude palm oil price (CPO) has hit the multi-year high above the RM3,500 level; this could translate to firmer earnings moving forward for plantation companies.
Also, health experts commented that vaccines in production would be effective against the new variant and this could rekindle trading interest on recovery-themed stocks.
The FBM KLCI has snapped the four-day pullback with a bullish engulfing candle. The Histogram indicator is still hovering in the negative region but the RSI has shown an uptick yesterday, an indication that the buying momentum could continue today.
The resistance is set around 1,660-1,680. Meanwhile, support is located around 1,620, followed by 1,600. – Dec 24, 2020
