Market Preview KLCI to trend higher, eyes close above 1,720 points

• Market Preview
  

KLCI to trend higher, eyes close above 1,720 points

By Surin Murugiah / theedgemarkets.com   | April 7, 2016 : 6:34 AM MYT 

KUALA LUMPUR (April 7): Stocks on Bursa Malaysia are expected to trend higher today in line with the overnight gains at most global markets, buoyed by firmer crude oil prices.
Global equity markets posted solid gains on Wednesday, aided by a climb in oil prices and a surge in healthcare stocks, while the U.S. dollar hit a fresh 17-month low against the yen after the minutes from the latest Federal Reserve meeting, according to Reuters.
Stocks on Wall Street and in Europe bounced from declines of more than 1 percent in the prior session, led by energy and healthcare sectors, it said.
AllianceDBS Research in ite evening edition yesterday said the FBM KLCI had on April 6 opened the day on a negative note.
However, it said non-follow through selling pressure in the area of 1,713.83 prompted risk taking buying interest to chip in.
It said this lifted the benchmark index to a high of 1,722.75 before settling at 1,717.01 (down 1.07 points or 0.06%). 
“In the broader market, losers outnumbered gainers with 434 stocks ending lower and 359 stocks finishing higher. That gave a market breadth of 0.82 indicating the bears were in control,” it said.
AllianceDBS Research said the lower low followed the higher high on April 6 indicated the presence of supportive buying interest.
“The weak market opening should have provided the sellers with a good chance to sell down the market, but sellers apparently were seen reluctant to play an aggressive selling game.
“The sellers seemed to know when not to trade just as much as when to engage the market.
“Given the way this market carried itself in the last 4 days, buyers and sellers are thus expected to continue exchanging their stock position between 1,706 and 1,727 until we see a breakout of the range,” it said.
The research house said that an upside breakout of 1,727 would see a test of next resistance at 1,745.
It said that conversely, a fall below 1,706 would put pressure on the market down to the subsequent support at 1,698.
It said that indicator wise, the MACD was below the 9-day moving average line.  
“The analysis of overall market action on April 6 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,722.75 level on April 7,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that may be in focus today include: HCK Capital Group Bhd, Press Metal Bhd, Cycle & Carriage Bintang Bhd, RHB Capital Bhd, Gabungan AQRS Bhd, Reach Energy Bhd, Titijaya Land Bhd, Pentamaster Corp Bhd and Elsoft Research Bhd.