Market Preview KLCI to trend sideways, immediate hurdle seen at 1,635

by **Cals** Fri 17 Jun 2016, 02:56

Market Preview

[size=28]KLCI to trend sideways, immediate hurdle seen at 1,635

By Surin Murugiah / theedgemarkets.com | June 16, 2016 : 6:07 AM MYT

KUALA LUMPUR (June 16): Stocks on Bursa Malaysia are expected to trend sideways today, as sentiment is anticipated to remain tepid in line with the overnight lower close at Wall Street.

The U.S. dollar fell along with bond yields on Wednesday after the Federal Reserve left U.S. interest rates unchanged and hinted at a less aggressive outlook for rates, according to Reuters.

U.S. stocks initially added to gains following the Fed statement but ended lower amid concerns about economic growth, it said.

AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on June 15 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through selling pressure.

It said the inability of benchmark index to go below the previous day’s low of 1,619.48 prompted risk taking buyers to establish some of the recently beaten down blue chip stocks.

It said this lifted the market to 1,629.05 before settling at 1,627.96 (up 1.85 points or 0.11%).

“In the broader market, losers outnumbered gainers with 409 stocks ending lower and 311 stocks finishing higher. That gave a market breadth of 0.76, indicating the bears were in control,” it said.

AllianceDBS Research said that having made lower low for 4 consecutive days, the market had on June 15 registered a higher low with buyers in better control over the sellers.

“While there may be more willing buyers than willing sellers on June 15, the weak market sentiment created by the downside on June 13 is expected to cap market advance with immediate hurdle seen at 1,635.

“In fact, there is still an ongoing battle between the buyers and the sellers in the area of 1,622 with sellers seen gauging the availability of supportive buying pressure and buyers on the other hand were eager to know whether the sellers would take advantage of the opportunity to sell further.

“A close below 1,622 would put pressure on the market down to the subsequent support at 1,611,” it said.

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

“The analysis of overall market action on June 15 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,629.05 level on June 16,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include: Hap Seng Consolidated Bhd, Malaysia Smelting Corporation Bhd, Sapura Resources Bhd, Tien Wah Press Holdings Bhd, Hiap Teck Venture Bhd, Rex Industry Bhd and Kossan Rubber Industries Bhd.

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