KUALA LUMPUR (Jan 14): The FBM KLCI is expected to trend cautiously today with immediate support seen at 1,637 points, in line with the overnight tumble at Wall Street.
U.S. stocks tumbled on Wednesday to their lowest close since September and oil prices gave up an early rally on mounting worries about the global economy, according to Reuters.
Major U.S. stock indexes finished down more than 2 percent, with the Nasdaq off more than 3 percent. The S&P 500 ended a two-day rebound, closing below 1,900 for the first time since September, it said.
AllianceDBS Research in its evening edition Wednesday said despite the up close in the preceding day, the FBM KLCI had on Jan 13 traded within previous day’s range to form an inside day bar as market participants chose not to play an aggressive selling game.
It said in the absence of stronger selling interest, the benchmark index was in the green throughout the trading sessions before settling at 1,642.54 (up 1.17 points or 0.07%).
“In the broader market, gainers outnumbered losers with 459 stocks ending higher and 371 stocks finishing lower. That gave a market breadth of 1.23 indicating the bulls were in control,” it said.
AllianceDBS Research said another day of inside day bar was witnessed on Jan 12.
“This implied that market participants were still unwilling to play an aggressive game.
“The benchmark index may be presently seen at a level where buying demand and selling supply forces are at equilibrium point.
“However, sellers were believed to be looking for an opportunity to sell again with buyers on the other hand waiting for a meaningful consolidation before making a buying decision,” it said.
The research house said given such a market scenario, the market is likely to confine its trading activity between 1,637 and 1,657 for the time being.
It said a fall below 1,637 would put pressure on the market down to the subsequent support zone, 1,620 – 1,627.
However, it said a rise above 1,657 should see a market reversal to the upside, adding that indicator wise, the MACD was below the 9-day moving average line.
“The analysis of overall market action on Jan 13 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,646.48 level on Jan 14,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, the companies that may be in focus today could include the following: HeveaBoard Bhd, Pintaras Jaya Bhd, CIMB Group Holdings Bhd, Dufu Technology Bhd, PUC Founder Bhd, Scanwolf Corporation Bhd, Bina Puri Holdings Bhd, UEM Edgenta Bhd and UEM Sunrise Bhd.