BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Heavyweight stocks retreated yesterday, unable to break through the 1,640 points barrier which was also its highest level for the year.
At the same time, the market’s condition was reaching near overbought levels, thus a pullback was also in the offing.
While the heavyweights pulled back, the broader market was mostly positive, continuing to bounce back from their recent downtrend as retail players picked-up some of the beaten down sector leaders.
We see market conditions remaining mixed with stocks that made substantial headway during the week to still endure profit taking spells that could keep the FBM KLCI subdued heading into the last trading day of the week.
At the same time, there are also fewer compelling buying opportunities among index-linked stocks after their recent run-up and this could further diminish the near-term upside potential.
Although we think a mixed market environment could prevail, the selling pressure is also light, and we think that the key index should be able to hold up above the 1,620 level for the most part.
Below that, the other support is at the psychological 1,600 points level, while the hurdles remain at 1,640 and the 1,650 points respectively.
Malacca Securities Research
The FBM KLCI took a breather following its rally since last Friday, mainly dragged down by the losses in Nestlé (M) Bhd, Petronas-related counters and telecommunication heavyweights.
Tracking the gains on Wall Street overnight after the US President Joe Biden signing the COVID-19 relief bill, we expect the local bourse to see some rebound amid growing optimism in the market, especially after a bash down in technology stocks recently.
Meanwhile, we believe the lower liners should continue to move higher at this juncture.
Commodities-wise, crude palm oil (CPO) price has climbed above the RM4,000 per tonne level, recorded at RM4,060.
The FBM KLCI snapped its four-day winning streak. Given the technical indicators remained positive as the MACD Histogram has extended another green bar while the RSI is hovering above 50, we reckon the pullback is likely to be temporary with the key index should continue its uptrend over the near term.
Resistance is set around 1,650-1,660 while support is located at 1,600-1,620. – March 12, 2021
