BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Profit taking activities escalated on Bursa Malaysia as market confidence waned in tandem with the sagging sentiments on regional markets.
At the same time, foreign selling also picked up pace to add to the FBM KLCI’s fall yesterday.
Conditions elsewhere were also dour with market breadth decidedly negative despite the mixed closing of the lower liner and broader market share indices.
Amid the increased selling pressure, traded volumes picked up to its highest level in two months.
Conditions are looking frail again after the past three session’s weakness that has also reversed the earlier optimism over the COVID-19 vaccine availability.
The market’s retreat to below the 1,600 points level has also resulted in sentiments becoming increasingly cautious and this could leave sentiments guarded again.
Although there are no signs of a rebound as yet, we do not rule out a small market bounce to end the week on mild bargain hunting activities on some of the beaten down sector leaders.
As it is, we are still in the opinion that the economic recovery is still unfolding that could provide a longer-term booster to the market.
For now, we think the FBM KLCI could be angling to find support around the 1,560-1,570 levels, while the hurdles at the 1,580 and 1, 590 levels respectively.
Malacca Securities Research
In line with most regional peers, the FBM KLCI skidded on profit taking activities for the third straight session and market sentiment may remain cautious ahead of the weekend.
Despite ongoing profit taking, we opine the downside risk could be limited as some bargain hunting may start to take place ahead of the full blown reporting season next week.
Meanwhile, the Brent crude oil price has loses its grip, pulling back from level above the US$65/barrel level. This may prompt traders to take profit on oil & gas (O&G) counters after a decent rally
The FBM KLCI slid to close below its immediate support level at 1,580. We expect the current consolidation move shall continue given both the MACD Histogram and RSI suggesting that the momentum is weak at this current juncture.
We expect FBM KLCI may revisit support at 1,560, while its resistance is pegging around 1,600-1,620. – Feb 19, 2021