Friday 29 Mar 2024
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KUALA LUMPUR (Jan 15): The FBM KLCI is expected to trade range-bound today with 1,637-points as its support level, on the back of the higher overnight close at Wall Street.

The energy sector led the beaten-up U.S. stock market higher on Thursday as oil prices rebounded from 12-year lows, according to Reuters.

Major U.S. indexes climbed about 2 percent after dropping to 3-1/2 month lows on Wednesday. Gains in stocks and oil also helped push the U.S. dollar higher, while the increases in risk assets reduced demand for safe-haven gold and U.S. government debt, it said.

AllianceDBS Research in its evening edition Thursday said despite the up close in the preceding day, the FBM KLCI had on Jan 14 gapped down to a low of 1,632.34 as market participants chose to play a selling game in anticipation of a lower market.

It said under the persistent selling interest, the benchmark index was in the red throughout the trading sessions before settling near the day’s low at 1,632.34 (down 9.10 points or 0.55%).

“In the broader market, losers outnumbered gainers with 681 stocks ending lower and 222 stocks finishing higher. That gave a market breadth of 0.32 indicating the bears were in control,” it said.  

AllianceDBS Research said the downside gap indicated the urgency to liquidate stock positions.

“As soon as the last buying order at 1,639.30 was filled after the opening bell, sellers rushed in to book the next available buying orders in the queue.

“When more sellers began to chase the buyers in an attempt to get their selling orders done, the benchmark index came under pressure to go downward until the low of 1,632.34.

“Following the downside violation of the 1,637 support level on 14 Jan 2016, the market is expected to test next support zone, 1,620 - 1,627. The overhead resistance is pegged at 1,648,” it said.

The research house said that indicator wise, the MACD was below the 9-day moving average line.

“The analysis of overall market action on Jan 14 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,632.34 level on Jan 15,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, the companies that will be in focus today may include the following: UMW Holdings Bhd, HeiTech Padu Bhd, Pavilion REIT, SapuraKencana Petroleum Bhd, Atlan Holdings Bhd, IJM Corporation Bhd, and RCE Capital Bhd.

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