BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
It was yet another down day on Bursa Malaysia at the end of last week with banking stocks succumbing to another round of selling as the movement control order (MCO 2.0) continues to affect sentiments despite heavyweight glove makers providing some measure of support.
Conditions in the broader market were also subdued with selling re-emerging and resulted in market breadth tipping back into the negative territory despite total traded volumes rising for the day.
We see the near-term market conditions remaining unsettled and guarded with market players waiting for the Government’s decision on the MCO.
Depending on the upcoming decision, an extended lockdown could keep investor sentiments in the doldrums for longer as it will have a negative bearing on the economy and corporate earnings, while a relaxed condition could provide some leeway for the market to stage a rebound as the lockdown effects would be milder.
In any case, we think that market interest could remain insipid for the most part due to the lingering pandemic concerns and the country’s slower-than-expected recovery prospects.
As such, there is still downside bias with the supports now at the 1,550-1,560 levels, followed by the 1,540 level. The resistances, on the other hand, are at 1,580 and 1,600 points respectively.
Malacca Securities Research
Tracking the regional and Wall Street gains overnight, market players could be factoring in a conditional MCO (CMCO) instead of a strict MCO (albeit in a rising COVID-19 cases environment) moving forward to avoid further breakdowns in the economy.
Thus, we may anticipate a mild rebound moving forward. However, the rebound may attract profit taking activities as Malaysia’s COVID-19 status has not flattened out at this current juncture.
We might observe some trading interest within healthcare and vaccine related sectors in the near term.
As the FBM KLCI has formed a bearish candle last Friday, indicators remained mixed as the MACD Histogram has turned into a red bar, while the RSI crossed into oversold territory.
We believe the FBM KLCI may remain range-bound over the near term with the support pegged along 1,550-1,560, and resistance is envisaged around 1,600-1,610. – Feb 2, 2021
