KLCI to kick start March on higher note

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KUALA LUMPUR (March 2): The FBM KLCI is expected to trend cautiously higher today, building on its momentum from the past three months.

The local index had gained some 43 points in February, closing firmly above the crucial 1,800-point level.

U.S. stocks closed lower on the last trading day of February last Friday after mixed U.S. economic data on a day when European stocks hit records and oil prices rebounded for their first monthly gain since June, according to Reuters.

The Nasdaq was the weakest of the three major U.S. indexes on Friday, weighed down by Apple Inc as some investors took profits ahead of its March 9 product unveiling, it said.

AllianceDBS Research in its evening edition last Friday said that led by the settlement above the 1,818 level in the preceding day, the FBM KLCI had on Feb 27 traded higher to a high of 1,825.65 as some market participants continued to play on the buying side in anticipation of a higher market.

However, it said pre-weekend profit taking activity pushed the benchmark index down to a low of 1,811.74 before rebounding to settle at 1,821.21 (+0.34, +0.02%).

“In the broader market, losers outnumbered gainers with 484 stocks ending lower and 367 stocks finishing higher. That gave a market breadth of 0.75 indicating the bears were in control,” it said.

AllianceDBS Research said the benchmark index went on to register a higher high after the opening bell on Feb 27.

“However, the market participants were somehow cautious in their game play. This can be seen from marginal up close of only 0.34 point.

“Given the weak up close on Feb 27, a positive catalyst is necessary in order to have a stronger buying conviction,” it said.  

The research house said while the benchmark index was seen gearing up for a test of the recent high of 1,831 (Feb 4), but the market was likely to stay volatile with both the buyers and sellers are expected to exchange their stock positions heavily as market approaches the 1,831 level.

It said the support was pegged at 1,818.

The research house said a fall back below 1,818 on a close basis should see further consolidation between 1,818 and 1,800.

Indicator wise, the MACD is above the 9-day moving average line, it said.

“The analysis of overall market action on Feb 27 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,825.65 level on March 2,” said AllianceDBS Research.