BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Index heavyweights continue to retreat ahead of the weekend and for the second consecutive day as profit taking on banking and glove stocks escalated to nullify the gains on oil & gas (O&G) stocks.
While the heavyweights dithered, conditions elsewhere were still generally upbeat with broader market stocks continuing to post recovery from their earlier weakness bout.
This helped market breadth to stay positive, but market interest remains moderate at just a tad below the 10 billion shares mark.
The 1,640-1,645 levels which are the FBM KLCI’s year-to-date closing and intraday highs respectively are proving to be a difficult hurdle to clear due to the absence of significant follow-through buying interest.
Consequently, we think that the consolidation could prolong instead as there are still few domestic leads to stir investor interest and many stocks have already staged a decent rebound from their bout of oversold a month ago.
As it is, there are fewer compelling buying opportunities and we think the lack of follow through buying interest could also prompt further profit taking actions that could well see the weakness extending to the start of the week’s trading.
With the 1,620-level failing to hold, the key index could now dip back to the 1,600-1,610 support amid the continuing consolidation trend.
The 1,620 level, meanwhile, is the immediate hurdle, followed by the 1,630 level.
Malacca Securities Research
The FBM KLCI extended its losses amid profit taking activities prior to the weekend following the mixed performance in the regional markets.
Although the Wall Street was traded higher overnight, we expect the market sentiment on the local bourse to remain cautious ahead of the upcoming US Federal Reserve (Fed) Meeting where the Fed will deliver its decision on interest rate.
Meanwhile, the technology sector may see a mild pullback after its four-day rallies, mirroring the overnight losses on Nasdaq.
For commodities, crude palm oil (CPO) has hit multi-year highs, while crude oil is hovering near US$70/barrel.
The FBM KLCI ended the week with a negative undertone as profit taking activities escalated.
The technical indicators, however, stayed positive as the MACD Histogram has extended another green bar, while the RSI remains above 50.
We believe the FBM KLCI may consolidate in the coming week with resistances located at 1,650-1,660. Supports are pegged at 1,580-1,600. – March 15, 2021
