KUALA LUMPUR (April 27): The FBM KLCI is expected to track higher today in line with the rally at most global markets last week.
Equity markets worldwide climbed to record highs on Friday as solid corporate earnings and an all-time peak for the Nasdaq stock index stoked investor optimism, while the dollar eased on gloomy U.S. economic data, according to Reuters.
Amazon.com Inc, Microsoft Corp and Google Inc led Wall Street higher, pushing the Nasdaq to a second straight record closing high a day after it topped a record that had stood for more than 15 years, it said.
AllianceDBS Research in its evening edition last Friday said that despite the weak down close in the preceding day, the FBM KLCI had on April 24 reversed its position to settle at the day’s high of 1,862.58 (+16.50, +0.89%) as market participants changed their game play pattern from selling to buying in anticipation of a higher market.
“In the broader market, losers outnumbered gainers with 445 stocks ending lower and 393 stocks finishing higher. That gave a market breadth of 0.88 indicating the bears were in control,” it said.
AllianceDBS Research said the sudden market turnaround on April 24 was a surprise as the benchmark index was earlier expected to test the 1,845 support first.
The research house said the buyers apparently had chosen not to wait for the market to pull back down to the 1,845 level for re-entry.
“Following the up close at 1,862.58, the benchmark index is in position to test the recent high of 1,863 (2 Apr 2015).
“A crossover of 1,863 should see the market paving its way to the next hurdle 1,880. The support remains at 1,858,” it said.
The research house said indicator wise, the MACD was marginally above the 9-day moving average line.
“The analysis of overall market action on April 24 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,862.58 level on April 27,” said AllianceDBS Research.