Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 28): The FBM KLCI is expected to trade higher on Tuesday, albeit cautiously, in line with the near flat close at Wall Street.

Global equity markets slipped on Monday, hit by weak German business sentiment and another decline in oil, while Brazil slumped after incumbent Dilma Rousseff narrowly won a second term over an opponent seen as more pro-business, according to Reuters.

Major indexes on Wall Street ended mixed. The benchmark S&P 500 closed slightly lower after last week's big gains, hurt by another drop in energy shares as oil neared a four-year low. Disappointing data showing the pace of growth in the U.S. services sector slowed in October to a six-month low also sapped buying sentiment, it said.

AllianceDBS Research in its evening edition Oct 27 said the FBM KLCI traded higher again on Monday.

It said the benchmark index reached a high of 1,824.37 as market participants continued to play on the buying side in anticipation of a higher market.

The research house said that under the supportive buying interest, the benchmark index held its position well throughout most of the trading sessions before settling near the day’s high at 1,823.15 (+4.29 , +0.24%).  

In the broader market, gainers outnumbered losers with 633 stocks ending higher and 230 stocks finishing lower. That gave a market breadth of 2.75 indicating the bulls were in control, it added.   

AllianceDBS Research said the higher high on Monday indicated that buyers were still in better control over the sellers although some market participants were seen locking in a portion of their profits. In the last 6 days, the market has chalked up 58 points [1,824 (27 Oct 2014 minus 1,766 (17 Oct 2014)], representing a 44.7% recovery of the lost ground from 1,896.23 (8 Jul 2014) to 1,766.22.

“Given the up close on 27 Oct 2014, the market should trade higher again in the coming few days with immediate resistance pegged at 1,831. The support is at 1,810. Indicator wise, the MACD is above the 9-day moving average line. 

“The analysis of overall market action on 27 Oct 2014 revealed that buying power was stronger than selling pressure. As such, FBMKLCI would likely trade above the 1,824.37 level on 28 Oct 2014,” it said.

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