Friday 29 Mar 2024
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KUALA LUMPUR (Feb 22): The FBM KLCI is expected to remain cautious and stay tentative today in line with global markets that slipped last Friday as crude oil prices stabilised.

Major world stock markets slipped on Friday, but still had their best week this year, as crude oil prices stabilised, according to Reuters.

Yields on short-dated U.S. bond yields rose though after U.S. inflation data raised the possibility the Federal Reserve may raise interest again earlier than anticipated, it said.

AllianceDBS Research in its evening edition last Friday said despite the up close in the preceding day, the FBM KLCI had on Feb 19 traded within previous day’s range to form an inside day bar as market participants chose not to stage an immediate follow through buying support.

The research house said in the absence of stronger buying interest, the benchmark index came under profit taking pressure to settle at near the day’s low 1,674.88 (down 5.14 points or 0.31%) ahead of weekend.

“In the broader market, gainers outnumbered losers with 426 stocks ending higher and 382 stocks finishing lower. That gave a market breadth of 1.11 indicating the bulls were in control,” it said.  

AllianceDBS Research said the market did not trade in the direction of upside breakout on Feb 19.

The research house said this was because the market has been on the weak side for quite a while.

“Many market participants were reluctant to play an aggressive buying game at this juncture as they did not want to be caught in the wrong side of the game.

“The upside breakout of 1,672 on Feb 18 may have brought cheers to the investors and traders, but a majority of market participants believed that the crossover of 1,672 could be just a dead cat bounce.

“More technical pointers are thus needed for confirmation. Given the down close on Feb 19, the market is likely to move between 1,660 and 1,686 in the coming few days,” it said.

The research house said a fall below 1,660 would put pressure on the market down to the subsequent support at 1,650.

However, it said a crossover of 1,686 should pave the way towards the 1,700 psychological level.

It said that indicator wise, the MACD was above the 9-day moving average line.

“The analysis of overall market action on Feb 19 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,673.84 level on Feb 22,” said AllianceDBS Research.

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