KUALA LUMPUR (Jan 18): The FBM KLCI is expected to continue trending sideways today with its hurdle seen at 1,672 points, as investors remain cautious ahead of the Lunar New Year holidays at the month.
U.S. stocks and the dollar fell while gold and government bonds rose on Tuesday as investors fled for safety after President-elect Donald Trump said the U.S. currency was too strong and they also questioned if his campaign promises would be fulfilled, according to Reuters.
Meanwhile sterling jumped as Prime Minister Theresa May said Britain would quit the European Union single market when the country leaves the EU, it said.
AllianceDBS Research in its evening edition Tuesday said despite the sell down in the preceding day, the FBM KLCI had on Jan 17 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through selling pressure.
It said in the absence of stronger selling interest, the benchmark index kept its position in the green end throughout the trading sessions before settling at 1,663.03 (up 4.19 points or 0.25%).
“In the broader market, gainers outnumbered losers with 411 stocks ending higher and 366 stocks finishing lower. That gave a market breadth of 1.12 indicating the bulls were in control,” it said.
AllianceDBS Research said the non-follow through selling pressure on Jan 17 was a surprise given the size of the down move on Jan 16.
“Apparently, the ability on the part of market to stay supportive above the 1,660 level after the opening bell had given the buying confidence.
“Those market participants that did not sell on Jan 16 had also chosen not to liquidate their stock positions when the benchmark index held its position above previous day’s low of 1,658.84.
“This increased willingness to buy and decreased willingness to sell had resulted in the formation of an inside day bar,” it said.
The research house said following the up close on Jan 17, we should see an attempt to trade higher with immediate hurdle at 1,672.
However, it said a reversal to go below 1,658 would put pressure on the market to the subsequent support at 1,652.
It said that indicator wise, the MACD is still above the 9-day moving average line.
“The analysis of overall market action on Jan 17 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,664.90 level on Jan 18,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that may be in focus today could include Hua Yang Bhd, Malayan Banking Bhd, Felda Global Ventures Holdings Bhd, S P Setia Bhd, Sime Darby Bhd, Ekovest Bhd, Toyo Ink Group Bhd, Priceworth International Bhd and Silk Holdings Bhd.