Friday 29 Mar 2024
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KUALA LUMPUR (Jan 11): The FBM KLCI is expected to stabilise and trend range-bound today in line with the global markets that had  neutral clossings last Friday.

The benchmark S&P 500 U.S. stock index on Friday notched its worst five-day start to a year on record as fear of a slowdown in China offset a surprisingly strong payrolls report in the United States, according to Reuters.

Brent and U.S. crude futures prices extended their weekly slide to more than 10 percent, pressured by unrelenting oversupply and a bleak demand outlook, it said.

AllianceDBS Research in its evening edition last Friday said that dampened by the down close in the preceding day, the FBM KLCI had on Jan 8 violated the 1,650 support to reach an intraday low of 1,648.66 after the opening bell as some market participants continued to play on the selling side in anticipation of a lower market.

However, it said non-follow through selling pressure in the area of 1,648.66 prompted risk taking buyers to scoop up some good quality beaten down blue chips.

It said this lifted the benchmark index to a high of 1,664.53 before settling at 1,657.61 (up 2.48 points or 0.15%).

“In the broader market, gainers outnumbered losers with 528 stocks ending higher and 375 stocks finishing lower. That gave a market breadth of 1.4 indicating the bulls were in control,” it said.  

AllianceDBS Research said the lower low followed by a downside penetration of the 1,650 support on Jan 8 was expected as many market participants were beginning to feel jittery about the market.

“However, the benchmark index did not go far down below the 1,650 level because rules-based market players were seen unwilling to sell heavily into the market.

“Basically, rules-based market players would want to see additional technical evidence for confirmation.

“Following settlement at 1,657.61, we should see supportive game play between 1,650 and 1,687 in the next few days. A fall below 1,650 again would put pressure on the market down to the subsequent support at 1,640,” it said.

The research house said that indicator wise, the MACD was still marginally above the 9- day moving average line.

“The analysis of overall market action on Jan 8 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,664.53 level on Jan 11,” said AllianceDBS Research.

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