What to expect on Bursa Malaysia today

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

After an insipid start to the day, the key index managed to not only recover its intraday losses but also gained ground in the afternoon session as bargain hunting returned on selective index heavyweights.

This also allowed the key index to climb back above the 1,600 points level at the close.

However, market breadth was still decidedly negative with losers still overwhelming gainers, with traded volumes also thinner amid the more difficult market conditions.

Despite yesterday’s rebound, it remains to be seen if there will be sufficient follow through buying interest to sustain the gains, even as the key index looks to extricate from its mildly oversold conditions.

As it is, market interest is thinning due to a more cautious environment with the domestic political intrigue still largely on market players’ mind.

In addition, the rising COVID-19 cases are also leaving sentiments warier as a prolong outbreak could derail the country’s economic recovery prospects for 2021.

In the interim, however, we think there could be further near-term gains albeit milder due to the still cautious near-term outlook that may prompt quick profit taking actions ahead of the weekend.

As a result, we think the 1,610 level is a significant near-term hurdle, followed by the 1,620 level. The supports, meanwhile, are at 1,590 and 1,580 points respectively.

Malacca Securities Research

Following the rebound yesterday, we believe that the local bourse is now attempting to find stability as investors bargain hunt and nibble on beaten down stocks.

While there are signs of return in foreign funds, we remain cautious amid the negative market undertone as the number of new COVID-19 cases in Malaysia surpassed the 3,000 mark yesterday.

The lower liners are expected to remain in the purple patch as we believe the possibility of rotational play may take precedence amid the improved trading liquidity.

The FBM KLCI has formed a hammer candle to recover all its intraday losses as the key index re-claimed the daily EMA60 level. With signs of recovery taking shape, the immediate resistance is located at 1,630-1,650.

On the flipside, the immediate supports are at 1,580 and 1,550. Indicators have turned mixed as the MACD Histogram has turned green, while the relative strength index (RSI) remains below 50, suggesting a potential technical rebound to take shape. – Jan 8, 2021

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