BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Although the FBM KLCI tipped higher yesterday, it surrendered most of its intraday gains in the afternoon session as quick profit taking actions emerged, particularly on glove maker stocks that were the leading gainers in the past few sessions.
Conditions elsewhere also improved with the lower liners and broader market indices posting decent recoveries on renewed bargain hunting activities after their recent weakness spell, thus helping market breadth to stay positive.
Despite the still relatively thin market following, the Malaysian equity market is likely to sustain its positive trend over the near term as it continues to recover from its recent bout of consolidation while casting aside the lingering COVID-19 concerns as well as its impact on the economy.
At the same time, the Government’s move to allow most economic sectors to restart even with the extended movement control order (MCO) could provide some minor reprieve to the sagging economic outlook.
Collectively, this could provide some more lift to market conditions by allowing the FBM KLCI to continue building up a base between the 1,580 and 1,600 points levels, hence prolonging the upside bias for the time being.
Apart from the above support and resistance levels, the others are at 1,575 and 1,590 points respectively.
Malacca Securities Research
After experiencing a downward trend since mid-January, the FBM KLCI delivered a second session of gain as most of the counters ended positive except for healthcare stocks.
As investors are likely to have priced in news of further lockdown measures, buying interest in selected counters with high earning certainty during the February reporting period can be expected while the broader market should be lifted by the mildly positive performance on Wall Street overnight.
The FBM KLCI has rebounded for the past two trading days, but the selling pressure was noted along 1,600 psychological level.
The technical indicators are still negative bias at this juncture; the MACD Line is below zero, while the RSI is below 50.
The FBM KLCI’s support will be set around 1,550-1,560, while resistance is located around 1,600-1,610. – Feb 4, 2021
