Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (May 25): The FBM KLCI is expected to consolidate between the 1,780 and 1,800-point level and trend sideways today in line with the weaker global markets last Friday.

Global equity markets dipped modestly Friday but remained near record highs, while the yield on U.S. government debt rose as a gain in core consumer prices in April should keep the Federal Reserve on course to raise interest rates later this year, according to Reuters.

Fed Chair Janet Yellen is expected to acknowledge recent sluggishness in the U.S. economy, including a near-stagnant performance in the first few months of the year, in a speech slated for 1:00 p.m. ET (1700 GMT), it said.

AllianceDBS Research in its evening edition last Friday said that dampened by the weak down close in the preceding day, the FBM KLCI had on May 22 broken below the 1,795 support to reach the lowest low of 1,780.11 since March 18 as market participants continued to play on the selling side in anticipation of a lower market.

The research house said that in the absence of stronger supportive buying interest, the benchmark index was in the red throughout the trading sessions before settling off the day’s low at 1,787.50 (- 7.54 , - 0.42%) ahead of weekend.

“In the broader market, losers outnumbered gainers with 497 stocks ending lower and 296 stocks finishing higher. That gave a market breadth of 0.59 indicating the bears were in control,” it said.

AllianceDBS Research said the benchmark index slid into the 1,780 zone on May 22.

The research house said sellers were again the dominant force in the game play, and this can be seen from the lower low and lower high market setup.

“The downside violation of 1,795 coupled with the weak down close on May 22 indicated a shift of the market trading sentiment from neutral to negative.

“Given the overwhelming selling pressure in recent days, risk- adverse buyers would not be seen rushing in to establish stock positions just because the stock valuation has just got cheaper.

“A more conservative buying game play can be expected,” it said.

The research house said therefore, investors could see further stock liquidation activity in the coming few days with immediate market support now pegged at 1,770.

It said the overhead resistance zone is between 1,795 and 1,800.

Indicator wise, the MACD is below the 9-day moving average line, it said.

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

“As such, the FBM KLCI would likely trade below the 1,780.11 level on May 25,” said AllianceDBS Research.

      Print
      Text Size
      Share