Market Preview KLCI to trend higher, support seen at 1,700-1,680 points

by **Cals** Tue 22 Mar 2016, 01:31

Market Preview

[size=28]KLCI to trend higher, support seen at 1,700-1,680 points

By Surin Murugiah / theedgemarkets.com | March 21, 2016 : 6:30 AM MYT

KUALA LUMPUR (March 21): The FBM KLCI is poised to trend higher today in line with the gains last Friday at most global markets, with support seen at between 1,700 and 1,680 points.

World equity markets were poised for a fifth week of gains on Friday, their best run in more than two years, as a 2016 high for oil, the dollar's recent decline and a more optimistic view of the economy combined to boost investor confidence, according to Reuters.

Stocks in Europe gained and Wall Street rose for a third day as the dollar steadied after a third week of declines that took it to its lowest against other major currencies since October, it said.

Affin Hwang IB vice president and head of retail research Datuk Dr Nazri Khan said that going forward, he expects the Bursa FBM KLCI to remain steady and trend higher, driven by improved ringgit (4.0400 the best performance since August 2015), rising oil and crude palm oil prices, positive statement from Federal Reserve and more global central bank stimulus (Europe, China and Japan).

He said global stocks briefly pushed into positive territory for the year as a combination of further gains for oil prices and a dovish Federal Reserve made for a bullish session on Wall Street.

Nazri, who is also president of the Malaysian Association of Technical Analysts said that on the technical front, the FBM KLCI rose 24 points (1.58%) year-to-date to close higher on the back of stronger trading volume, finishing at the highest level for 2016.

He said the strength was driven by stronger ringgit counters and is also aided by the rise in the banking counters.

"Technically, the FBM KLCI has broken its sideways range after (it) successfully retested its one-month high level of 1,710 and remains above its 20 and 50 daily moving averages.

"Momentum [is] positive as reflected by the uprising MACD and RSI, reinforcing the upward trajectory in the near term. Hence, we reiterate our view that the index is likely to rise higher.

"Overhead resistance are seen at 1,730 and 1,750 with supports noted at 1,700 and 1,680 respectively," he said.

Based on corporate announcements and news flow last Friday, companies that may be in focus today could include the following: Hock Seng Lee Bhd, Fiamma Holdings Bhd, Stone Master Corporation Bhd, Global Oriental Bhd, Berjaya Sports Toto Bhd, Magni-Tech Industries Bhd and Maxwell International Holdings Bhd.
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