Sunday 04 Jun 2023
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KUALA LUMPUR (July 21): The FBM KLCI is expected to trade flat and hover around the 1,720-point level today in line with the lacklustre overnight close at Wall Street and modest global markets.

Gold prices plunged to their lowest in more than five years on Monday, at one point dropping 4 percent on aggressive selling out of China, while the U.S. dollar hit a three-month high on expectations for higher U.S. interest rates, according to Reuters.

Equity markets posted modest gains, with the focus remaining on earnings season, it said.

AllianceDBS Research in its evening edition Monday said despite the last Thursday’s down close, the FBM KLCI had on July 20 opened the day on a positive note as some market participants chose to play on the buying side in anticipation of a higher market.

The research house said the benchmark index subsequently traded to a high of 1,735.75.

However, it said non-follow through buying in the area of 1,735.75 prompted profit taking activity to kick in.

It said this pushed the benchmark index down to 1,720.02 before settling off the day’s low at 1,724.13 (- 2.60, - 0.15%).

“In the broader market, gainers outnumbered losers with 452 stocks ending higher and 319 stocks finishing lower. That gave a market breadth of 1.41 indicating the bulls were in control,” it said.

AllianceDBS Research said the benchmark index gapped up on the opening bell to cross over the 1,728 hurdle on July 20.

However, it said the market did not go far up because market participants were seen unwilling to play an aggressive buying game after the recent recovery of 50 points in 7 market days.

“Moreover, the day’s high of 1,735.75 was only 4 points away from the 1,739 resistance. Following the near day’s low down close on July 20, the market is expected to move between 1,720 and 1,735 in the coming few days.

“A rise above 1,735 should see attempt to test the next hurdle at 1,739.

“Conversely, a fall below 1,720 would put pressure on the market down to the subsequent support at 1,706,” it said.

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

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

“As such, the FBM KLCI would likely trade below the 1,720.02 level on July 21,” said AllianceDBS Research.


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