Thursday 28 Mar 2024
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KUALA LUMPUR (March 22): The FBM KLCI could pullback today in line with the overnight tumble at most global markets.

U.S. and European shares tumbled on Tuesday on concerns that higher interest rates and pro-growth U.S. policies were on hold, boosting safe-haven Treasuries and gold and sending the dollar to a nearly four-month low against the yen, according to Reuters.

The U.S. S&P 500 financial sector fell as much as 3.1 percent and posted its biggest daily plunge in about nine months, contributing to the worst daily performance for the benchmark S&P 500 since Oct. 11, it said.

Benny Chew, managing director of AmResearch Sdn Bhd, in a technical note for the Edge Financial Daily said that the FBM KLCI tested and broke above the 1,740 points up trend channel resistance level and this indicates a strong bullish trend.

He said the immediate support level is at 1,710 points.

“The chart shows that the FBMKLCI is strongly bullish above the short and long term 30 and 200 day moving averages. The index is also above the wide Ichimoku Cloud indicator.

“Furthermore, the Cloud is expanding forward and this indicates that there is still strong support for the bullish trend, at least for the next one month.

Chew said the relative strength index and Momentum Oscillator indicators continued to increase and this indicates strong bullish momentum.

“Furthermore, the MACD indicator continued to increase and stayed above its trigger line or moving average after pulling back last week. However, these indicators also indicate that the index is at its overbought level.

“From the chart, the indicators show that the FBMKLCI is in a strong bullish rally and this rally is expected to continue. The increase in equity markets despite interest rate increase showed that investors find favour in the equity markets. The index is now setting its eye on 1,800 points.

“However, we may expect some pull back for profit taking this week but as long as the index stays above 1,710 points, the trend is still bullish towards 1,800 points,” said Chew.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include: Yong Tai Bhd, Mulpha International Bhd, Ranhill Holdings Bhd, Alam Maritim Resources Bhd, Redtone International Bhd, Telekom Malaysia Bhd, UMW Holdings Bhd and T7 Global Bhd.

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