BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malaysian equities staged a strong rebound yesterday following clarity on the country’s state of emergency and movement control order (MCO) rules, reversing the sagging sentiments a few session’s earlier.
This hastened bargain hunting activities that gained strength after some measure of political certainty was attained. Despite gainers are overwhelming losers, market participation remained modest with many players still adopting a wait-and-see stance.
While we expected Malaysian equities to rebound, it was much stronger-than-anticipated which we think could have been overdone with much of the gains helped by the return of foreign buying.
Although this is encouraging after they were new sellers over the past few years, it is still too early to assume that their buying is sustainable given that Malaysian corporate earnings recovery is still uneven.
As such, we think the FBM KLCI is still susceptible to more near-term vagaries that may temper its recovery.
However, we see the FBM KLCI attempting to stay above the 1,600-1,620 level for the time being with modest gains that could be punctuated by bouts of quick profit taking actions.
The immediate support is at 1,628 points while the resistances are at 1,640 and 1,650 points respectively.
Malacca Securities Research
Tracking the gains on regional markets, the FBM KLCI has closed at the highest level since the beginning of the year with buying interest seen in the recovery-themed stocks such as banking and gaming heavyweights.
Investors shrugged off concerns on the first day of MCO 2.0 while the essential sectors remain opened.
The key index may take a little following yesterday’s rallies, but we expect the downside to be limited.
The lower liners saw some rebound signs as the indexes made significant headway yesterday after recent consolidation.
The FBM KLCI has broken out above its immediate resistance at 1,630, albeit accompanied by lower trading volume.
With the technical indicators turning positive, we expect the key index to surge higher in the near- to mid-term after taking a mild breather.
The FBM KLCI’s key resistance will be located around 1,660. However, should the key index drops below 1,630, the next support is located around 1,590. – Jan 14, 2021