MARKET REVIEW

Global. Despite a weak closing from Dow overnight amid grim weekly jobless claim data and surging coronavirus cases, Asian markets ended mostly higher, driven by Covid-19 vaccines optimism and expectations a Biden administration would deliver more economic stimulus following the nomination of pro-stimulus Yellen as Treasury Secretary. Meanwhile, Wall St was closed overnight due to the Thanksgiving holiday. To recap, the Dow fell 173 pts to 29872 on 25 Nov after hitting all-time high at 30116 (on 24 Nov).

Malaysia. Tracking positive regional markets and the approval of the Budget 2021 at the policy stage with a majority voice vote (with the final debates in the committee stage will start from 30 Nov -15 Dec), KLCI jumped 14.5 pts to end at 1612.1. Markets breadth positive as 815 gainers edged 412 losers with 8.7bn securities traded for RM4.7bn.

TECHNICAL OUTLOOK: KLCI

Following back-to-back gains of 33.7 pts, KLCI has finally recaptured above the 10D SMA or 1596 and 1600 psychological levels, boosting the odds to rewrite YTD high of 1618. Taking out the said hurdles successfully would signal more uspide towards formidable resistances at 1640 (150W SMA) and 1669 (200W SMA) zones. Conversely, a decisive breakdown below 1596 and 1579 (76.4% FR) supports would be negative for the index, targeting 1555-1535 levels next.

MARKET OUTLOOK

Technically, the approval of the draft Budget 2021 is likely to boost the odds for KLCI to rewrite YTD high of 1618 today. A decisive breakout above this hurdle will lift the index higher towards more formidable 1640-1669 territory. Nevertheless, we expect volatility to persist (with key supports at 1600-1579-1555) due to the CMCO 2.0 repercussion to the economy amid elevated Covid-19 cases and cluste

Source: Hong Leong Investment Bank Research - 27 Nov 2020