KLCI to trade in tight band, support pegged at 1,713

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KUALA LUMPUR (Nov 29): The FBM KLCI is expected to trade in a tight band today with immediate support pegged at 1,713.

Wall Street hit record highs and the dollar edged up on Tuesday as traders eyed progress on U.S. tax reform, strong economic data and comments from Federal Reserve chair nominee Jerome Powell, according to Reuters.

The British pound briefly rallied more than 1 percent from its lows after The Daily Telegraph newspaper reported that Britain and the European Union had agreed on the Brexit divorce bill, citing unidentified sources, it said.

The Dow Jones Industrial Average rose 247.19 points, or 1.05 percent, to 23,827.97, the S&P 500 gained 24.73 points, or 0.95 percent, to 2,626.15 and the Nasdaq Composite added 31.50 points, or 0.46 percent, to 6,910.02, said Reuters.

AllianceDBS Research in its evening edition Tuesday said despite the last few minutes buying of selective blue chip stocks to push up the index to close at the day’s high of 1,719.86 in the preceding day, the FBM KLCI had on Nov 28 broken below the 1,713 level to reach an intraday low of 1,709.94 as market participants chose to play on the selling side in anticipation of a lower market.

It said under the persistent selling interest, the benchmark index was in the red throughout the trading sessions before settling off the day’s low at 1,714.42 (down 5.44 points or 0.32%).

“In the broader market, losers outnumbered gainers with 613 stocks ending lower and 286 stocks finishing higher. That gave a market breadth of 0.46 indicating the bears were in control,” it said.

AllianceDBS Research said the market made a lower low again on Nov 28 with the benchmark index breaking the 1,713 level on the downside to reach an intraday low of 1,709.94.

“This downside violation of 1,713 showed that market participants were still more willing to play a selling game given a choice to trade the market.

“Moreover, there was no follow through buying power to fill the downside gap left behind on Nov 24.

“A study of the way this market carried itself revealed that the selling supply exceeded the buying demand.

“However, the return of the benchmark index to settle above the 1,713 level suggested that 1,713 carried certain amount of significance,” it said.

The research house said following the down close on Nov 28, there should see selling attempt again with immediate support pegged at 1,713.

It said a fall below 1,713 would put pressure on the market to test the subsequent support at 1,705.  

“The analysis of overall market action on Nov 28 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,709.94 level on Nov 29,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, stocks in focus today may include: Ta Ann Holdings Bhd, Compugates Holdings Bhd, UEM Edgenta Bhd, Taliworks Corp Bhd, UMW Holdings Bhd, IJM Corporation Bhd, IJM Plantations Bhd, Dutch Lady Milk Industries Bhd, Advancecon Holdings Bhd, Malaysian Resources Corp Bhd, Gamuda Bhd, AMMB Holdings Bhd and CIMB Group Holdings Bhd.