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KLCI seen trading range bound, immediate support at 1,725 – 1,737.

TheEdge Tue, Jun 05, 2018 05:29am - 1 year ago

KUALA LUMPUR (June 5): The FBM KLCI is trading range bound today, immediate support zone, 1,725 – 1,737, in line with the overnight gains at most global markets.

World stock indexes and Treasury yields climbed on Monday, while the dollar fell to a two-week low as political tensions in Europe eased, according to Reuters.

Italy's anti-establishment parties formed a coalition government on Friday to end three months of political deadlock, it said.

The Dow Jones Industrial Average rose 177.06 points, or 0.72 percent, to 24,812.27, the S&P 500 gained 12.22 points, or 0.45 percent, to 2,746.84 and the Nasdaq Composite added 47.76 points, or 0.63 percent, to 7,602.09, said Reuters.

AllianceDBS Research in its evening edition Monday said the FBM KLCI had on June 4 traded marginally higher to 1,761.61 as some market participants continued to play on the buying side in anticipation of a higher market.

It said in the absence of stronger buying interest at 1,761.61, profit taking activity chipped in to push the benchmark index down to a low of 1,745.75 before rebounding to settle at 1,755.17 (down 1.21 points or 0.07%).

“In the broader market, gainers outnumbered losers with 477 stocks ending higher and 444 stocks finishing lower. That gave a market breadth of 1.07 indicating the bulls were in better control with the bears closely matched,” it said.

AllianceDBS Research said the market made a higher high on June 4 with the benchmark reaching a day’s high of 1,761.61.

“An initial buying attempt was initiated with an opening level above the 1,760 hurdle, but the benchmark index did not inch any higher in the subsequent trading hours as market participants were unwilling to play a more aggressive buying game for fear of sudden market reversal given the high market volatility displayed in recent days.

“In the eyes of many market participants, the recovery of the 62 points measuring from the low of 1,709.51 (May 30) to the high of 1,761.61 (June 4) was generally viewed as a technical reaction to the market downtrend.

“So, what happened to the current market was an attempt to consolidate its position to lift the benchmark index away from the immediate risk of breaking below the psychological level at 1,700.

“An ability on the part of the benchmark index to stay above the 1,700 level would help to contain the market buying confidence from further deterioration,” it said.

The research house said following the down close on June 4, there should be selling attempt with immediate support zone, 1,725 – 1,737. 

“The analysis of overall market action on June 4 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,745.75 level on June 5,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies in focus today may include: My E.G. Services Bhd, Green Packet Bhd, Tien Wah Press Holdings Bhd, Wah Seong Corp Bhd, Handal Resources Bhd, Berjaya Land Bhd, Cymao Holdings Bhd, WCT Holdings Bhd and LBS Bina Group Bhd.

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