BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI remains on the rise as institutional funds, particularly foreign funds, were seen active in their portfolio realignments yesterday.
The key index was quick off the blocks, jumping to an intraday high of nearly 1,696 points before ending the day near its day low on quick profit taking activities.
The positivity also extended to the broader market with gaining stocks nearly doubled that of losing ones with traded volumes climbing back above the 10 billion shares mark.
The key index’s inability in holding on to its gains and ending the day near its low could be a sign of market fatigue after its overbought streak and the corresponding lofty valuations that could also be a prelude for near-term profit taking activities.
However, with the market’s upward momentum is still largely intact; any pullback in our opinion is likely to be superficial for now.
As it is, there remains hope for more stimulus measures to be introduced or prolonged, thus continue to raise the risk appetite for equities over the medium term.
Therefore, we think any pullback could be mild at this juncture with the bouts of buying support and bargain hunting helping to shore up the market.
This may also preserve the downside to only around the 1,674 level with the next support pegged at the 1,662 level. The resistances, meanwhile, remain at the 1,695 and the 1,700-point levels.
Malacca Securities Research
With the US stock markets inching higher overnight, we believe stocks on the local may proceed higher, but profit taking could emerge on glove manufacturers on the back of COVID-19 cases which were observed in several glove companies.
This may attract profit taking activities after a two-day rebound.
With the ongoing market talks on the Kuala Lumpur-Singapore High Speed Rail (HSR) project, we opine traders will continue to trade within the construction and property sector.
Meanwhile, Brent oil price has surged above US$51 on the back of crude oil inventory declined by 3.1 million barrels last week.
The FBM KLCI has gapped up and closed lower on the intraday basis, but still on track with the upward move since the recovery started in early November.
The key index may consolidate sideways before advancing higher towards 1,720-1,740. Meanwhile, support is located around 1,640 followed by 1,620. – Dec 17, 2020
