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 on Bursa Malaysia remains on a recovery mode yesterday, making minute gains on the back of selected bargain hunting on some of the index constituents.
Conditions elsewhere, however, were broadly lower with market breadth turning negative amid the renewed profit taking on some of the speculative stocks and lower liners after their recent upsides.
In particular, oil and gas (O&G) stocks succumbed to fresh selling pressure in tandem with the retreat in oil prices.
As we have noted, market conditions have been relatively indifferent of late with fewer catalysts to fuel further gains.
This has also resulted in a drop in market interest as many stocks have already made substantial headway over the past year that has more than reflected the recovery from the COVID-19 pandemic conditions.
Market players are still awaiting for clearer signs of further economic recovery and the corresponding earnings growth recovery before deciding on the next course of action.
In view of the lack of direction, we see Malaysian equities making little headway over the near term and the key index is likely to remain range-bound between the 1,620 and 1,630 levels over the near term.
The other support and resistance levels are at 1,600 and 1,640 respectively, the latter is also the FBM KLCI’s year high.
Malacca Securities Research
The FBM KLCI finished higher yesterday as the key index tracked overnight gains on Wall Street despite weaker oil price and crude palm oil prices.
Meanwhile, we believe the year-to-date low COVID-19 daily confirmed cases recorded yesterday may continue to drive market sentiment on the positive tone although the upside may be capped by the overnight Wall Street mixed sentiment.
Commodity-wise, the Brent crude oil has seen a decline on renewed demand concerns due to the new wave of COVID-19 cases in Europe, while the crude palm oil (CPO) dropped on market expectation on production improvement.
The FBM KLCI extended its gains after recovering all its intraday losses in line with most regional peers.
Indicator-wise, the MACD Histogram has extended another red bar while the RSI is still hovering above 50.
With the mixed signals, we believe the FBM KLCI may trend sideways with its resistance set along 1,630-1,640. Support is pegged around 1,590-1,600. – March 17, 2021
