KUALA LUMPUR (Jan 19): The FBM KLCI is expected to extend its consolidation today and drift lower, with immediate support at 1,818, in line with pause at most global markets.
A gauge of world stock markets dipped on Thursday, pausing after notching a string of record highs, as a decline in Boeing and healthcare names weighed on U.S. equities, according to Reuters.
Shares on Wall Street took a breather after the strongest performance of the year for the Dow Jones Industrial Average and the benchmark S&P 500 saw the indexes close above 26,000 and 2,800, respectively, for the first time, it said.
The Dow Jones Industrial Average fell 92.35 points, or 0.35 percent, to 26,023.3, the S&P 500 lost 3.38 points, or 0.12 percent, to 2,799.18 and the Nasdaq Composite added 5.06 points, or 0.07 percent, to 7,303.34, said Reuters.
AllianceDBS Research in its evening edition Thursday said that led by the up close in the preceding day, the FBM KLCI had on Jan 18 traded higher to 1,831.32 as some market participants continued to play on the buying side in anticipation of a higher market.
However, it said non-follow through buying support in the area of 1,831.32 prompted renewed selling interest to chip in.
It said this pushed the benchmark index down to 1,821.21 before settling near the day’s low at 1,821.60 (down 7.03 points or 0.38%).
“In the broader market, losers outnumbered gainers with 764 stocks ending lower and 274 stocks finishing higher. That gave a market breadth of 0.35 indicating the bears were in better control,” it said.
AllianceDBS Research said the market made a higher high on Jan 18 with the benchmark index hitting a high of 1,831.32.
“The market had an excellence opening level above the 1,831 hurdle at 1,831.24, but the benchmark index failed to sustain its position for long as market participants were unwilling to play a more aggressive buying game.
“This can be seen from the day’s high of 1,831.32 which was followed by a fall back below the 1,831 level.
“As soon as the buying order was filled at 1,831.32, aggressive sellers apparently took advantage of the higher market to liquidate their stock positions because 1,831 was viewed a selling supply level,”it said.
AllianceDBS Research said the market came under pressure to trade down to 1,821.21 when the number of willing sellers exceeded the number of willing buyers.
It said in other words, those market participants did analyse the risk and reward profile by looking at the current market environment as they did not want to be caught in a situation where the reward was not large enough to endorse a buying position.
The research house said following the down close on Jan 18, there should be selling attempt again with immediate support at 1,818.
It said a downside violation of 1,818 would send the benchmark index down to the subsequent support level at 1,812.
“The analysis of overall market action on Jan 18 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,821.21 level on Jan 19,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include the following: Atta Global Group Bhd, Chemical Company of Malaysia Bhd, S P Setia Bhd, Sime Darby Bhd, Green Packet Bhd, Crest Builder Holdings Bhd and CIMB Group Holdings Bhd.