KLCI week ahead KLCI to find support at 1,800 level

by **Cals** Mon 30 Mar 2015, 01:15

KLCI week ahead
KLCI to find support at 1,800 level

By Surin Murugiah / theedgemarkets.com | March 28, 2015 : 10:52 AM MYT

KUALA LUMPUR (March 28): The FBM KLCI is expected to find support at the 1,800-pont level next week and continue an upleg higher,

Wall Street on Friday closed higher for the first time in a week, lifted by rising tech stocks, while oil prices slumped 5 percent on receding fears about Middle East fighting disrupting supplies, according to Reuters.

U.S. Treasury debt prices jumped on government data indicating U.S. economic growth was slowing and the dollar was down, while gold had its first losing day after a seven-session rally, it said.

[size=14]AffinHwang IB vice president and head of retail research Dr Nazri Khan said that going forward, he expects the FBM KLCI to find support at 1800 support and continue an upleg higher, tracking reduced geopolitical tension and broad commodities strength driven by dollar retreat and stimulus from European Central Banks and People Bank of China.

Nazri said that the global markets had stabled from the risk-off tone, after last week downdraft receded from political turmoil in Yemen and Greek bailout uncertainty.

“Last week saw a soft session for Asian bourses and the biggest daily drop in a year on Wall Street (Dow Jones & Nasdaq down 2.3% & 2.4%) as oil prices spike in response to increased military action in Yemen.

“We are impressed, despite regional weakness Bursa Malaysia has shown relative strength as it zoomed 1.5% from low to high last week,” he said.

Nazri, who is also the president of the Malaysian Association of Technical Analysts, said that overall, the FBM KLCI which showed relative strength to settle above its multi-month resistance level of 1,800 should continue its winning streak on the back of a stronger oil and currency movement.

He said this was reflected by firmer ringgit (up 1.4% from 3.71 to 3.65) which was underpinned by more optimism on foreign inflow into the local capital market.

Nazri said the bullish case was also supported by Bursa small cap stocks which continue to outperform as energy minors (KNM Group Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Perdana Petroleum Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Carimin Petroleum Bhd, Alam Maritim Resoures Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Dayang Enterprise Holdings Bhd ([You must be registered and logged in to see this image.]Financial Dashboard), TH Heavy Engineering Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)) revelled in the surging oil price.

“On the stock front, we believe there are ample picks following the recent correction,” he said.

Nazri said given the optimistic 2H2015 sentiment, he preferred blue chips that possess momentum capacity to rebound on event play after the recent sell-off.

“Conservative investors should buy our featured Stocks namely Bursa Malaysia Bhd ([You must be registered and logged in to see this image.] Financial Dashboard),Cahya Mata Sarawak Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Hartalega Holdings Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Unisem (M) Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), IHH Healthcare Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Westports Holdings Bhd ([You must be registered and logged in to see this image.]Financial Dashboard), KPJ Healthcare Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Berjaya Auto Bhd ([You must be registered and logged in to see this image.] Financial Dashboard),Karex Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), Scicom (MSC) Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), GD Express Carrier Bhd, Kossan Rubber Industries Bhd, QL Resources Bhd and Time Dotcom Bhd.

“Finally aggressive investors should long index futures and buy selective warrants namely Sunway Bhd WA, Inar Amerton Bhd WB, Insas Bhd WB, KPJ WB and mostly all FBM KLCI warrants ie. FBMKLCI-CJ, FBMKLCI-CK, FBMKLCI-CM and FBMKLCI-CN,” he said.
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