KLCI to start 2Q on positive tone

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KUALA LUMPUR (April 1): The FBM KLCI is expected to trend higher today and remain on course to start the second quarter of 2015 on a positive note, on the back of the improved buying sentiment at the local bourse.

The euro closed out the worst quarter in its 15-year history on Tuesday, slammed by monetary policy changes and worries about Greece, while U.S. stocks retreated a day after posting big gains, according to Reuters.

But the S&P 500 and the Nasdaq registered their ninth straight quarterly gains, it said.

AllianceDBS Research in its evening edition Tuesday said that supported by the up close in the preceding day, the FBM KLCI had on March 31 traded into the 1,830 zone to reach a high of 1,832.85 after the opening bell as market participants continued to play on the buying side in anticipation of a higher market.

However, it said weak follow through buying pressure in the area of 1,832 prompted profit taking activity.

The research house said this pushed the benchmark index to close off day’s high at 1,830.78 (+8.95, +0.49%).

“In the broader market, gainers outnumbered losers with 417 stocks ending higher and 410 stocks finishing lower. That gave a market breadth of 1.01 indicating the bulls were in control with the bears closely matched,” it said.

AllianceDBS Research said the benchmark index ran into resistance selling at 1,832 on March 31 as some market participants decided to lock in a portion of their profits in the area of 1,832.

The research house said following the up close, the benchmark index was in position to test higher level, but a meaningful upside breakout of the 1,832 must be accompanied by high market volume in order to pave the way for the market to trade into higher ground in the later days.

It said a crossover of 1,832 should gear the benchmark index towards the next resistance zone, 1,845 – 1,858. The immediate support is pegged at 1,815.

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

“The analysis of overall market action on March 31 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,832.85 level on April 1,” said AllianceDBS Research.