Friday 29 Mar 2024
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KUALA LUMPUR (May 22): The FBM KLCI could trend sideways today as local investor sentiment remains mixed despite the tabling of the Eleventh Malaysia Plan yesterday that did not seem to make a positive impact at the local stock market.

Equity markets inched ahead on Thursday, with investors brushing aside mixed economic data in Europe and the United States, while the dollar slipped after a three-day rally and U.S. Treasury yields declined, according to Reuters.

Oil prices rallied almost 3 percent, with Brent crude topping $66 a barrel on signs a global supply glut may be starting to ease, it said.

AllianceDBS Research in its evening edition Thursday said that the FBM KLCI had on May 21 breached the 1,800 psychological level to a low of 1,793.34 after the opening bell as market participants chose to play on the selling side in anticipation of a lower market.

The research house said that under the persistent selling interest, the benchmark index kept its position in the red throughout most of the trading sessions before settling near the day’s low at 1,795.04 (- 15.07 , - 0.83%).

“In the broader market, losers outnumbered gainers with 628 stocks ending lower and 259 stocks finishing higher. That gave a market breadth of 0.41 indicating the bears were in control,” it said.

AllianceDBS Research said the benchmark index declined further on 21 May 2015 with lower high for 3 consecutive days.

The downside violation of the 1,800 psychological level indicated that sellers were overwhelming, and the buyers were unwilling to lend a strong supportive hand.

In fact, the drop of 30 points from the high of 1,823 (18 May 2015) to the low of 1,793 (21 May 2015) within 3 market days apparently was still not viewed low enough for the buyers to establish stock positions.

AllianceDBS Reseaerch said that given the weak down close, the market is expected to gear downward again with immediate support at 1,795.

“A fall below 1,795 again could send the market down to the subsequent support at 1,770. The overhead resistance is at 1,814,” 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 May 21 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,793.34 level on May 22,” said AllianceDBS Research.

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