business
Bargain hunting to lift KLCI, test 1,730 hurdle
Following the down close yesterday, the benchmark index is likely to move between 1,675 and 1,700 in the coming days as buyers and sellers continue to exchange their stock positions. – Reuters file pic, March 10, 2016. Stocks on Bursa Malaysia could trend higher today, lifted by some bargain hunting activities, in line with the overnight gains at most global markets and likely test its next hurdle of 1,730.
Oil prices resumed a more than month-long rally on Wednesday, helping to lift world stock markets, while the euro held steady ahead of this week's European Central Bank meeting.
Brent moved back above US$40 a barrel on speculation the world's largest exporters would agree this month to freeze production and help reduce the largest global build in crude oil in years, it said.
AllianceDBS Research in its evening edition yesterday said that dampened by the down close in the preceding day, the FBM KLCI had on March 9 opened the day on a negative note.
The research house said the benchmark index subsequently fell below the 1,685 support to reach a low of 1,676.93 as market continued to play on the selling side in anticipation of a lower market.
It said under the persistent selling interest, the benchmark index languished in the red throughout most the trading sessions before rebounding to settle at the day’s high of 1,686.35 (down 1.51 points or 0.09%).
“In the broader market, gainers outnumbered losers with 446 stocks ending higher and 341 stocks finishing lower. That gave a market breadth of 1.30 indicating the bulls were in control,” it said.
AllianceDBS Research said the lower low on March 9 did not come as a surprise given the weak down close in the previous day, but sellers somehow became cautious in the area of 1,676.93.
“This gave a chance to aggressive buyers to snap up some beaten down stocks which lifted the benchmark index back up to 1,686.35.
“Following the down close on March 9, the benchmark index is likely to move between 1,675 and 1,700 in the coming few days as buyers and sellers continue to exchange their stock positions.
“A crossover of 1,700 would see a test of next hurdle at 1,730,” it said.
However, the research house said an inability on the part of benchmark index to stay supportive at 1,675 would risk the upside gap left behind on March 2 being filled.
The research house said that indicator wise, the MACD was still above the 9-day moving average line.
“The analysis of overall market action on March 9 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,686.35 level on March 10,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that may be in focus today could include the following: Berjaya Food Bhd, Scomi Engineering Bhd, Zelan Bhd, Hup Seng Industries Bhd, Yong Tai Bhd, Hiap Huat Holdings Bhd, Luster Industries Bhd and Bina Darulaman Bhd. – The Edge Markets, March 10, 2016.
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