KUALA LUMPUR (June 23): The FBM KLCI is expected to sustain its momentum and build further on its gains and stay above the 1,730-point level today on the back of the overnight advance at most global markets.
World stock indexes rose and US Treasuries prices fell on Monday as Greece made a new offer on a reform package to avoid a default on its debts, raising hopes that a deal with international creditors was still possible, according to Reuters.
Gold prices fell as global equities jumped, it said.
Athens on Monday presented new reform proposals including higher taxes and moves to curtail early retirement. Euro zone leaders voiced guarded optimism that the proposals could lead to a deal this week, said Reuters.
AllianceDBS Research in its evening edition Monday said that led by the last Friday’s up close, the FBM KLCI had on June 22 opened on a firm note.
The research house said the benchmark index overcame the 1,727–1,733 resistance zone to reach an intraday high of 1,735.90 as market participants continued to play on the buying side in anticipation of a higher market.
It said that under the persistent supportive buying interest, the benchmark index was in the green throughout the trading sessions before settling at 1,732.76 (+10.99, +0.64%).
“In the broader market, gainers outnumbered losers with 561 stocks ending higher and 238 stocks finishing lower. That gave a market breadth of 2.35 indicating the bulls were in control,” it said.
AllianceDBS Research said having kept the settlement above the 1,718 level on June 18 and 19, the market rose further to reach a high of 1,735.90 in the subsequent market day (June 22).
The research house said the crossover of the 1,727–1,733 resistance zone was viewed as encouraging, as the market had earlier failed to surpass the same hurdle due to the fear of seeing more immediate declines to the 1,700–1,706 level.
It said the buying confidence seemed to have improved following the ability of the benchmark index to hold its fort at 1,718.
“Given the up close at 1,732.76 on June 22, the benchmark index is believed to be in the process of staging an overdue technical rebound with next resistance selling zone pegged between 1,745 and 1,750,” it said.
The research house said that indicator wise, the MACD was above the 9-day moving average line.
“The analysis of overall market action on June 22 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,735.90 level on June 23,” said AllianceDBS Research.