KLCI to trend sideways, immediate hurdle at 1,726

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KUALA LUMPUR (Nov 23): The FBM KLCI is expected to trend sideways today immediate hurdle seen at 1,726.

A gauge of global equity performance scaled fresh record highs on Wednesday, propelled by bullish growth and company earnings outlooks, while crude oil prices rose to more than two-year highs, according to Reuters.

Asia again led global stock markets higher as Hong Kong's main Hang Seng index closed above 30,000 for the first time in a decade. China's H-shares index and Japan's Nikkei share average also rose, it said.

The Dow Jones Industrial Average fell 52.67 points, or 0.22 percent, to 23,538.16. The S&P 500 lost 0.44 point, or 0.02 percent, to 2,598.59 and the Nasdaq Composite added 10.36 points, or 0.15 percent, to 6,872.84, said Reuters.

AllianceDBS Research in its evening edition Wednesday said that led by the up close in the preceding day, the FBM KLCI had on Nov 22 opened the day on a positive note.

It said the benchmark index subsequently traded to high of 1,727.77 as market participants continued to play a buying game in anticipation of a higher market.

The research house said that in the absence of stronger selling interest, the benchmark index was in the green throughout trading sessions before settling at 1,723.54 (up 2.86 or 0.17%).

“In the broader market, gainers outnumbered losers with 589 stocks ending higher and 318 stocks finishing higher. That gave a market breadth of 1.85 indicating the bulls were in better control,” it said.

AllianceDBS Research said having kept its low above the 1,713 level with an up close at 1,720.68 on Nov 21, the market saw follow through buying interest after the opening bell in the next market day.

“There were more willing buyers than willing sellers on Nov 22 as the inability on the part of the benchmark index to go below 1,716 prompted market participants to take the chance of playing the game on the buying side.

“This can be seen from the day’s high of 1,727.77. Moreover, the day’s low of 1,716 on 21 Nov 2017 was 3 points away from the upper level of the support zone between 1,706 and 1,713.

“This gave rise a chance of technical rebound in the eyes of risk taking market participants. A high probability of trading opportunity was believed to have been created as the recent sell off had pushed the market down to an oversold zone,” it said.

The research house said following the up close, there should thus be buying attempt again with immediate hurdle at 1,726.

It said a crossover of 1,726 should see a test of next resistance at 1,734.

“The analysis of overall market action on Nov 22 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,721.36 level on Nov 23,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies in focus today may include: Kerjaya Prospek Group Bhd, Telekom Malaysia Bhd, TSH Resources Bdh, APFT Bhd, YTL Corp Bhd, IJM Corp Bhd, Hovid Bhd, Econpile Holdings Bhd, Kuala Lumpur Kepong Bhd, China Stationery Ltd, Tambun Indah Land Bhd, TH Plantations Bhd, Genting Plantations Bhd and WCT Holdings Bhd.