What to expect on Bursa Malaysia today

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

Index-linked stocks continue to lose steam after their recent rally with the key index slipping back below the 1,600-point level yesterday amid increased profit taking among banking stocks.

The selling was also in tandem with a similar trend among regional peers following their recent rally.

In line with the pullback among the heavyweights, many lower liners also retreated as they succumbed to profit taking and selling into strength to leave market breadth on the negative side for the day.

We expected the market’s uptick to continue amid the improving market sentiments with the COVID-19 vaccine availability, but yesterday’s profit taking spell was quick to materialise to leave the key index at the crossroads again.

Nevertheless, we think the consolidation is likely to be mild and the market should be able to quickly regain its upper hand as the pandemic situation looks to ease further, thus increasing hopes for a firmer economic recovery ahead.

There could still be some hesitation, but we think this should quickly pass and give way to renewed bargain hunting that could lift the key index back above the 1,600 again.

Beyond that, the FBM KLCI’s hurdles are at the 1,605-1,610 levels, followed by the 1,620 level. The supports, meanwhile, are at 1,590 and 1,580 points respectively.

Malacca Securities Research

Following the announcement of movement control order (MCO 2.0) extension in several states, the local bourse endured a rough ride as economic recovery progress took another backseat.

The weakness was also largely in line with the negative performance across regional peers which we reckon that the pullback is deem to be healthy to allow the recent gains to be digested.

While the market liquidity has yet to taper, we think the rotational play among the lower liners may prolong with the on-going batch of corporate earnings release largely in focus.

The FBM KLCI has formed a bearish candle as the key index has slipped below the 1,600 level. Although the pullback stance is still largely in place, we think that the downside risk will be cushioned towards the support at 1,580, followed by 1,560.

On the flipside, a breakout above 1,600 may indicate that recovery is back on track towards the next resistances at 1,620-1,650. Indicators have turned weaker as the MACD Histogram has turned red, while the RSI has slipped below 50. – Feb 18, 2021

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