The Malaysian stock market's upward trend is seen to stay intact this week after starting out the first week of 2011 on a strong note, but bouts of profit-taking are to be expected.
Oil and gas stocks may be in focus, an analyst said.
The benchmark FBM KLCI Index had a weekly gain of 3.5 per cent, or 53.3 points, to end at a record high of 1,572.21 last Friday.
"Gains may not be as strong in the second week after the strong share price run-up last week. There may be profit-taking in between, but the index's uprend is definitely intact," said Choo Swee Kee, chief investment officer at TA Investment Management Bhd.
His firm has a bullish stance on the market for the whole of January on the back of flush liquidity.
"We're attracting quite a bit of foreign funds, we're seeing more corporate activities on the local front, and the government is expected to announce some projects under the Economic Transformation Programme (ETP) this week," Choo said, pointing that these would help move shares.
Additionally, people would have gotten bonuses at work, and this may have added to the "feel-good" factor out there, he noted.
The market is likely to see different sectors take turns to shine.
Maybank Investment Bank (MIB) head of retail research and chief chartist Lee Cheng Hooi expects the thematic play to settle on oil and gas stocks this week.
Stocks like Kencana, Petronas Chemicals and SapuraCrest, all of which MIB is positive on, could be in focus.
Interest in second-liner stocks are picking up, he noted.
Retail investors are still not active in the market and are itching to go in, Lee said. "They didn't have the foresight to go in earlier, so now they're just waiting for a correction to run in," he remarked.
Lee sees immediate resistance for the index this week at 1,576 points and support at 1,532 level.
Daily trading volumes were strong last week, breaching the two billion-share mark on all days but Monday. The last time the daily volume broke that mark was in mid-2009.