KLCI to trade cautiously higher ahead of holiday period

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KUALA LUMPUR (Feb 17): The  FBM KLCI is expected to trade higher today, in line with the advance at most global markets despite the holiday at US markets on Monday.

Global shares hit their highest since September and the euro firmed on Monday with investors cautiously optimistic that euro zone finance ministers would reach a funding deal for debt-laden Greece, according to Reuters.

The prospect of Greece and its partners reaching agreement on a debt deal helped push yields on low-risk government bonds higher, though both sides struck hardline postures as the talks began at 1400 GMT, it said.

U.S. financial markets were closed on Monday for the Presidents' Day holiday.

AllianceDBS Research in its evening edition Monday said that led by the positive sentiment following the market’s settlement above the 1,800 level last Friday, the FBM KLCI had on Feb 16 traded higher to a high of 1,809.71 as market participants continued to play on the buying side in anticipation of a higher market.

It said under the stronger buying interest, the benchmark index kept its position firm throughout the trading sessions before settling near the day’s high at 1,808.89 (+ 7.94 , + 0.44%).

“In the broader market, gainers outnumbered losers with 452 stocks ending higher and 352 stocks finishing lower. That gave a market breadth of 1.28 indicating the bulls were in control,” said the research house.

AllianceDBS Research said the higher high on Feb 16 was encouraging as it further recouped another portion of the lost ground on the Feb 11 & 12.

It said with the benchmark index holding its day’s low at 1,800.24 on Feb 16, the market appears to be ready for a buying game play above the 1,800 level in the coming few days.

However, the research house said the benchmark index was likely to run into an immediate overhead resistance at the 1,813 level.

It said a crossover of 1,813 would see the market gearing towards the recent high of 1,818 (9 Feb 2015).

It said market support was pegged at 1,800.

Indicator wise, the MACD is still marginally below the 9-day moving average line, it said.

“The analysis of overall market action on Feb 16 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,809.71 level on Feb 17,” said AllianceDBS Research.