KUALA LUMPUR (Feb 16): The FBM KLCI is expected to trend higher today in line with the gains at most global markets last Friday on renewed optimism of global economic growth.
Stock markets worldwide rose on Friday on stronger-than-expected economic growth in Germany and optimism that Greece would reach a deal with its creditors, while oil prices gained on signs that excess supply may ebb, according to Reuters.
The S&P 500 index closed at a record high on Friday, as energy shares gained with oil prices, while the Nasdaq composite index hit a 15-year high helped by technology stocks, it said.
AllianceDBS Research in its evening last Friday said despite the down close in the preceding day, the FBM KLCI had on Feb 13 traded higher to settle at the day’s high of 1,800.95 (+11.88, +0.66%) ahead of weekend as market participants chose to play on the buying side in anticipation of a higher market.
It said that in the broader market, gainers outnumbered losers with 493 stocks ending higher and 303 stocks finishing lower, adding that gave a market breadth of 1.62 indicating the bulls were in control.
AllianceDBS Research said the higher high on Feb 13 indicated that buyers were in better control over the sellers.
It said given the return of the benchmark index above the 1,796 level, the market was poised to trade higher again in the coming few days with immediate hurdle at 1,812.
The research house said a crossover of 1,812 should see the benchmark index gearing towards a test of recent high of 1,818 (Feb 9).
However, it said a fall back below the 1,796 level could send the market down to the recent low of 1,780 (Feb 12).
Indicator wise, the MACD is marginally below the 9-day moving average line, said the research house.
“The analysis of overall market action on Feb 13 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,800.95 level on Feb 16,” said Alliance Research.