BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Once again, there was little reprieve for Malaysian equities as they continue to head south, spooked by the rising domestic COVID-19 cases and the deepening political impasse within the ruling coalition.
As a result, profit taking activities escalated among some of late last year’s leading lights like banking and consumer stocks to send the key index to its lowest level in nearly five weeks as well as surrendering its 2020 gains.
Market breadth was decidedly negative with losers thumping gainers, while traded volumes were moderate.
Our anticipated follow through rebound failed to materialise yesterday as the selling pressure was still resolute with the selling spree turning rotational. This left sentiments warier and the key index in the oversold territory.
While there is little to suggest that the present weakness trend brought about renewed concerns that a domestic lockdown could be implemented to curb the fresh COVID-19 outbreak, we do not rule out a mild rebound from the oversold conditions.
Nevertheless, with the overall market condition remaining cautious, the rebound may also be short-lived as the selling into strength could leave equity prices listless for longer.
For now, the hurdles are at 1,600 and 1,610 points, with the supports pegged at 1,580 and 1,565 points respectively.
Malacca Securities Research
It was another lacklustre performance on the FBM KLCI as sentiment was largely dented by the renewed political uncertainty.
With the volatility has yet to be abated, we reckon that the sentiment will remain largely indifferent over the foreseeable future.
At the same time, the elevated new cases of COVID-19 will continue to pile pressure on the pace of economic recovery as the prospects of more stringent measures on the conditional movement control order (CMCO) being discussed.
The lower liners will also remain choppy as traders are opting to keep their trades on a shorter time frame to reduce exposure to the volatile market environment.
The FBM KLCI formed a bearish candle as the key index tripped below the daily EMA60 level for the first time in two months.
As the volatility has yet to abate, downside pressure will likely to be in place towards the immediate support at 1,580, followed by 1,550. Any upside will be capped towards the immediate resistances at 1,630-1,660. – Jan 7, 2021
