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 ended the day in the red, Malaysian equities were mostly on the rise with the lower liners and broader market shares leadings the upsides.
On the key index, mild profit taking activities in the afternoon, particularly on utility giant Tenaga Nasional,Bhd resulted in it giving up its earlier session’s gains and offsetting the advances in oil and gas (O&G) stocks that rose on higher crude oil prices.
Nevertheless, traded volumes continue to improve as more participants return to the market amid the improving sentiments.
On the whole, market conditions are still sanguine, riding on hopes that pandemic conditions will be easing with the availability of the COVID-19 vaccines.
As such, there appears to be more room for further near-term upsides, particularly as market participation is picking up and foreign selling has dwindled.
We continue to think that the key index could retest the 1,620 level due to firmer market undertone, but the upward trajectory could be milder as more pronounced gains could encourage steeper profit taking and derail the ongoing uptrend.
In addition, there could be some hesitancy with market players waiting for more corporate results to be announced before the end of the month to gauge earnings growth prospects for the remainder of the year.
Beyond 1,620 points, the hurdles are at 1,625 and 1,630 points respectively. The supports, on the other hand, are at 1,600 and 1,590 points.
Malacca Securities Research
Profit taking activities emerged on the FBM KLCI, snapping the four-day positive streak.
We believe sentiment should stay positive despite the mixed trading tone on Wall Street and the movement control order (MCO 2.0) extension in several states as we think the ongoing rally in the crude oil price and the clearer timeline for the COVID-19 vaccination programme should be the focus for the economic to recover moving forward.
As we are heading into the reporting season, companies with high earnings certainty could be under the limelight.
The FBM KLCI slid into red in afternoon trading, but still hovering above 1,600. As the technical indicators remained positive with the MACD Histogram extending another green bar, while the RSI hovering above 50, we believe the key index will continue to climb higher, revisiting the resistance along 1,620-1,650.
Meanwhile, the support level is located around 1,600, followed by 1,560. – Feb 17, 2021
