Friday 29 Mar 2024
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KUALA LUMPUR (Oct 19): The FBM KLCI is expected to trend sideways with an upward bias today in line with the gains at most global markets last Friday.

Stocks in major world markets rose to a two-month high on Friday and the dollar ticked up, boosted by views that the European Central Bank may provide more stimulus to the euro zone economy, according to Reuters.

Oil prices rose nearly 2 percent as traders covered short positions after four days of losses and the U.S. oil rig count fell for a seventh straight week, it said.

AllianceDBS Research in its evening edition last Friday said the FBM KLCI stayed in the green throughout the trading sessions with a day’s high of 1,720.42 on Oct 16 after a firm opening level.

The research house said under the persistent buying interest, the benchmark index held its position within previous day’s range to form an inside day bar before settling at 1,716.82 (+3.57, +0.21%) ahead of weekend.

“In the broader market, gainers outnumbered losers with 487 stocks ending higher and 345 stocks finishing lower. That gave a market breadth of 1.41 indicating the bulls were in control,” it said.

AllianceDBS Research said the market continued to witness heavy exchange of stock positions among the market participants with the benchmark index trading in a confined trading range over the past 6 market days.

The research house said market participants were seen unwilling to play an aggressive outright buying game, although the benchmark index has been staying above the 1,700 level with high daily market volume in excess of 2.0 billion shares for 5 consecutive days.

“This can be seen from the inside day formation on Oct 13 and Oct 16.

“Given the resistance selling zone between 1,719 and 1,721, a positive catalyst is necessary in order to attract new market participation for the next up leg with immediate support at 1,700.

“A crossover of 1,721 could send the market up to the subsequent resistance zone, 1,740 – 1,750,” it said.

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

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

“As such, the FBM KLCI would likely trade above the 1,720.42 level on Oct 19,” said AllianceDBS Research.

 

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