KUALA LUMPUR (May 21): The FBM KLCI is expected to trend sideways today as investors await the tabling of the Eleventh Malaysia Plan, which is highly expected to boost the local market.

However, prevailing global geopolitical conditions as well as concerns the Euro zone economy has kept investors on tenterhooks.

The dollar rose and U.S. Treasury yields fell on Wednesday after minutes from the latest Federal Reserve meeting bolstered expectations that U.S. interest rates will remain near zero until later in 2015, according to Reuters.

The minutes, released ahead of a much anticipated speech on Friday by Fed Chair Janet Yellen, showed that many officials at the April 28-29 meeting believed it would be premature to raise rates in June. Officials were concerned about soft consumer spending, though most Fed members expect the U.S. economy to pick up pace after a slowdown in the first quarter, it said.

AllianceDBS Research in its evening edition Wednesday said that despite the weak down close in the preceding day, the FBM KLCI had on May 20 opened on a positive note as some market participants took the chance to play on the buying side.

However, non-follow through buying interest prompted profit taking activity, said the research house.

It said this put pressure on the benchmark index down to a low of 1,807.95 before settling at 1,810.11 (+ 0.39, + 0.02%).

“In the broader market, losers outnumbered gainers with 413 stocks ending lower and 341 stocks finishing higher. That gave a market breadth of 0.82 indicating the bears were in control,” it said.

AllianceDBS Research said the fall back below the 1,814 level on May 19 saw a lower market in the subsequent day (May 20).

The research house said a closer study of the recent market movement revealed that the rise of 28 points [low of 1,795 (May 13) to the high of 1,823 (May 18)] represented about 38.8% correction of the fall from 1,867 (April 27) to the low of 1,795. “That coincided well with the 38.2% Fibonacci Retracement. This explained why many market participants were cautious on the buying side especially in the area of 1,823.

“Given what happened in the last 2 days, we should see further market consolidation between 1,802 and 1,814 in the coming few days,” it said.

The research house said a fall below 1,802 should see a test of recent low of 1,795 (May 13).

Conversely, it said a rise above 1,814 could lift the benchmark index back up to 1,823.

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

“The analysis of overall market action on May 20 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,807.95 level on May 21,” said AllianceDBS Research.