KUALA LUMPUR (Jan 23): The FBM KLCI is expected to trend range bound today, in line with the overnight gains at Wall Street, and test its next resistance at 1,841.
U.S. stocks surged in Monday afternoon trading after senators in Washington reached a deal to reopen the federal government, ending a 2-1/2-day shutdown that world markets had largely taken in stride, according to Reuters.
U.S. stocks jumped to new session highs after reports that the Senate had struck an agreement to keep the government open until Feb. 8, it said.
The Dow Jones Industrial Average rose 65.67 points, or 0.25 percent, to 26,137.39, the S&P 500 gained 13.41 points, or 0.48 percent, to 2,823.71 and the Nasdaq Composite added 48.93 points, or 0.67 percent, to 7,385.31, said Reuters.
AllianceDBS Research said that led by last Friday’s up close in the preceding day, the FBM KLCI had on Jan 22 crossed over the 1,831 hurdle to reach a high of 1,835.21 as some market participants continued to play on the buying side.
However, it said non-follow through buying interest in the area of 1,835.21 prompted renewed selling interest to chip in. This pushed the benchmark index down to 1,825.86 before rebounding to settle near the day’s high at 1,833.15 (up 4.32 points or 0.24%).
“In the broader market, gainers outnumbered losers with 520 stocks ending higher and 502 stocks finishing lower. That gave a market breadth of 1.03 indicating the bulls were in control with the bears closely matched,” it said.
AllianceDBS Research said the market crossed over the 1,831 hurdle to register a higher high of 1,835.21 on the opening bell on Jan 22.
“The crossover of 1,831 on opening bell was indeed a good attempt to pull the benchmark index up, but there was no follow through buying interest to carry the market higher than 1,835.21.
“Many market participants apparently did not want to jump in to establish stock positions for fear of market reversal, because they were unwilling to gamble on market continuing to move upward immediately after the opening bell.
“Given the way this market carried itself in recent days, certain market participants were seen working hard to keep the market position firm above the 1,818 level,” it said.
However, the research house said both buyers and sellers are now expected to continue exchanging their stock positions between 1,835 and 1,818 in the coming few days until we see a breakout of the range.
It said a crossover of 1,835 would see a test of next resistance at 1,841.
“The analysis of overall market action on Jan 22 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,825.86 level on Jan 23,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include the following: ManagePay Systems Bhd, Seacera Group Bhd, Sumatec Resources Bhd, Pasukhas Group Bhd, UCrest Bhd, MSM Malaysia Holdings Bhd, GHL Systems Bhd, UEM Sunrise Bhd and Bright Packaging Industry Bhd.