BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks rebounded last Friday despite the broader market remaining mostly uninspiring with selective banking, glove and oil & gas (O&G) stocks helping to shore up the FBM KLCI.
At the same time, it also bucked the weakness trend among regional peers that continues to be affected by the higher US bond yields.
Conditions elsewhere were still tepid, with traded volumes and market breadth still on the negative side for the day.
The start of the week could bring more upside bias following gains in key US indices at the end of last week.
This, however, will be dependent on the level of follow through buying which have been benign of late and resulted in the quick profit taking instead.
As it is, market participation is still on the thin side amid the lingering cautiousness due to concerns over earnings growth ahead.
Nevertheless, we think that the key index could be attempting to stay above the psychological 1,600 points level over the near term as it looks to build up a stronger base.
As such, we see the key index inching towards the 1,610 level over the near term, before making a pass at the more distant hurdle of the 1,620 level.
In the interim, the supports are pegged at the 1,590 and 1,580 levels respectively.
Malacca Securities Research
Last Friday, the FBM KLCI bucked the losses on Wall Street and surged above the 1,600 psychological level; the continued buying interest in banking heavyweights after Bank Negara Malaysia’s (BNM) decision to remain the overnight policy rate (OPR) coupled with the gains in energy stocks spurred the key index rally.
We reckon the positive momentum of the key index to continue as the rallies in the banking sector may indicate the market’s hope for economic recovery.
Meanwhile, the Brent oil price continued seeing its uptrend after OPEC and its allies decided to keep production steady through April.
The FBM KLCI marched higher to close marginally above the 1,600 psychological level. We believe the positive market sentiment will continue to push the key index higher over the near term.
The RSI has hooked above 50; indicating that the current momentum is positive. If the key index could sustain above 1,600, the next resistance is pegged at 1,620 while the support will be located around 1,550-1600. – March 8, 2021
