BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities lost ground prior to the Christmas break as profit taking took precedent again – a day after posting a decent recovery.
For the most part, the market environment was quiet ahead of the holidays with fresh buying interest noticeably absent and this was reflected in the thin traded volumes. At the same time, trading was mixed with losers and gainers almost equal.
With the year-end holidays in full swing, we see overall market participation remaining thin, but we also see the key index remaining stable on continuing bouts of support.
The combination of fewer market leads and thinner market interest will keep the FBM KLCI on an even keel and allow it to preserve most of the gains it attained in last month’s rally.
While we see the key index largely on a holding path, there could still be bouts of selective buying that could see some mild upside bias, mainly on portfolio re-positioning for the start of next year.
This may help the key index to climb back up to the 1,650 level and depending on the level of buying, the key index could also re-test the 1,660 level over the coming days. Support is located at 1,631 and 1,620 respectively.
Malacca Securities Research
Heading into the final week of 2020, we believe the market may still focus on window dressing activities, but upside could be limited given the new COVID-19 variant that is haunting the re-opening of the major economies.
We believe trading interest will hover around the construction, building materials and plantation counters.
We also expect glove manufacturers to have some support over the near term as they might benefit from the slower-than-expected reopening of economic activities due to the new COVID-19 variant.
The FBM KLCI continues to range-bound over the past three trading days, but the key index may trend marginally higher on the back of final week of window dressing activities.
Although the Histogram indicator remained in the negative region, the RSI is slightly above 50, suggesting that the downside risk could be limited. Next resistance is at 1,660-1,680 while support is at 1,620-1,640. – Dec 28, 2020
