KUALA LUMPUR (Oct 17): The FBM KLCI is seen trending higher today, in line with the overnight rally at most global markets, with immediate hurdle at 1,739.
Stocks across the world bounced back on Tuesday, supported by strong earnings results and expectations, while oil prices rose as evidence of higher U.S. production was overshadowed by concerns about supply from Iran and Saudi Arabia, according to Reuters.
Despite the rally in stocks, U.S. Treasury yields were little changed, it said.
The Dow Jones Industrial Average rose 547.87 points, or 2.17 percent, to 25,798.42, the S&P 500 gained 59.13 points, or 2.15 percent, to 2,809.92 and the Nasdaq Composite added 214.75 points, or 2.89 percent, to 7,645.49, said Reuters.
AllianceDBS Research in its evening edition yesterday said the FBM KLCI had on Oct 16 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through selling pressure.
It said in the absence of stronger selling interest, the benchmark index was in the green throughout most the trading sessions before settling at the day’s high of 1,736.84 (up 8.10 points or 0.47%).
It said in the broader market, losers outnumbered gainers with 439 stocks ending lower and 339 stocks finishing higher. That gave a market breadth of 0.77 indicating the bears were in better control.
AllianceDBS Research said the inside day bar indicated a pause in the game play with buyers and sellers seen in a balanced position.
“It was a surprise not seeing a lower low on Oct 16 given the down close in the preceding day, because the market had chalked up 57 points in 3 market days measuring from the low of 1,682 (Oct 11) to the high of 1,739 (Oct 15).
“While the higher low may have suggested the presence of supportive buying interest in the game play, it remains premature to confirm anything at this juncture.
“However, it would be better to see further pullback down to 1,710 - 1,717 for a healthier market development,” it said.
The research house said a study of the way this market carried itself on Oct 16 showed that market participants apparently had chosen to minimize external and internal distractions by playing a buy game.
It said following the up close on Oct 16, there should be buying attempt with immediate hurdle at 1,739.
“The analysis of overall market action on Oct 16 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,736.84 level on Oct 17,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: Serba Dinamik Holdings Bhd, Globaltec Formation Bhd, Barakah Offshore Petroleum Bhd, Nextgreen Global Bhd, Sapura Energy Bhd, Wegmans Holdings Bhd and Bumi Armada Bhd.