BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Yesterday, the FBM KLCI traded higher during the morning session before steeping into the red, dragged by major glove players as the appearance of COVID-19 cases among their labour force continue to stoke fears in the sector.
This was compounded by news reports of former Prime Minister Tun Dr Mahathir Mohamad and Tengku Razaleigh Hamzah holding a press conference which sparked broad profit-taking activities after mid-day.
Trading on the local bourse may continue to be upended with increased volatility as the country is rife with political uncertainty and speculation ahead of the third Budget 2021 reading later today.
We keep to our view that valuations appeared lofty and a pullback is due. In the interim, there is a resistance at the 1,690 level, while the supports are pegged at 1,650 and 1,631 points respectively.
Malacca Securities Research
Wall Street started the week on a mixed note amid the additional COVID-19 restrictions and this may spill-over towards stocks on the local front.
Also, the recent political developments ahead of the third budget reading in the parliamentary session today may limit the upside potential on the FBM KLCI as well as the broader market at least for the near term.
Once there is more clarity on the third budget vote, we might experience rekindling of buying interest moving forward. On a side note, the Brent oil price is hovering near the US$50 despite the new COVID-19 measures in the US.
The FBM KLCI has taken a pause after a five-day winning streak. The MACD Histogram has turned weaker yesterday, while the RSI is overbought.
Hence, the FBM KLCI could extend its consolidation move today with the potential support located around 1,640, followed by 1,620. Meanwhile, resistance is envisaged around 1,700 followed by 1,740. – Dec 15, 2020
