BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
It was a tale of two halves on the key index yesterday with the early day’s gains giving way to renewed selling in the afternoon session that saw it ending the day almost unchanged.
After finding stability following clarification on the new movement control order (MCO 2.0) and the state of emergency, there were also fewer available catalyst and more market players opted to stay on the sidelines.
As such, traded volumes continue to thin but market breadth was nearly equal.
After making a decent bounce back to above the 1,600 level, the market appears to have become directionless, awaiting for the latest MCO 2.0 to be played out as well as for more leads to emerge.
Meanwhile, an assessment of the impact of the ongoing MCO 2.0 is still being determined even as the impact on the economy and corporate earnings are likely to be milder vis-à-vis the first MCO last year.
Consequently, the wait-and-see stance is likely to continue ahead of the weekend and we see the FBM KLCI trending within a tight range between the 1,630 and 1,645 levels for the time being.
The other support and resistance levels are at 1,620 and 1,650 points respectively.
Malacca Securities Research
Tracking the negative sentiment on Wall Street, coupled with the pullback in the FBM KLCI yesterday, we expect trading tone on the local front to further consolidate.
Also, the overheated rally in the technology stocks may take a breather with traders digesting their gains over the next few days.
Given some of the essential sectors are still operating under MCO 2.0, companies shall be able to register some earnings at least for this quarter.
Meanwhile, we expect traders to be on the lookout for the Large Scale Solar 4 (LSS4) and immburigration-related news over the near term.
The FBM KLCI has taken a pause above the EMA9 yesterday. Based on the technical indicators, MACD Histogram has extended another green bar while the RSI is hovering above 50.
Hence, we should be expecting the FBM KLCI to take a mild breather along EMA9 before surging higher towards the envisaged resistance around 1,650-1,660.
Meanwhile, support will be set around 1,630 followed by 1,620. – Jan 15, 2021
