The FBMKLCI rose 12.35pt to close at 1,659.82 yesterday, buoyed by positive sentiment in the US market as index-linked counters rebounded strongly. Meanwhile, Asian equities were lifted by rallies in Hong Kong and emerging markets. The MSCI Asia Pacific Index rose 1% to a three-week high. The FBMKLCI’s top gainers were MISC (+3.2%), Axiata Group (+3.1%) and RHB Bank (+1.7%) while the top losers were Hap Seng Consolidated (-0.11%) and Petronas Dagangan (-0.1%). In the broader market, gainers outpaced losers 601 to 291 with 313 counters unchanged. Turnover was 2.51b shares valued at RM1.85b. Based on the daily candlestick chart, the FBMKLCI breached the previous immediate resistance of 1,650 yesterday with the RSI registering a bullish crossover above the 50pt threshold level, which implies further strong movement ahead. The index also penetrated and closed above the Ichimoku’s cloud, and thus looks set to retest the previous high of 1,665. This is supported by a bullish crossover in the MACD and DMI. We expect the index to continue the bullish movement towards the previous high of 1,665 in the near term. Support and resistance levels are revised as follows:

• Support: 1,630,1,611
• Resistance: 1,665,1,680

US stocks on Thursday closed mixed as gains in the healthcare, technology and consumer services sectors led shares higher while losses in the financials, industrials and basic materials sectors led shares lower. The DJIA lost 0.21%, to settle at 19,899.29 and the S&P500 edged lower by 0.08%, to 2,269.00. NASDAQ Composite index added 0.20% to settle at 5,487.94. The private sector added 153,000 jobs in December, according to ADP, a rate that was below forecasts, while first-time jobless claims fell 28,000 in the latest week, dropping to a nearly 43-year low. The US government will issue its own jobs report on Friday. Falling stocks outnumbered advancing ones on the NYSE by 1,725 to 1,438 and 60 ended unchanged. On the Nasdaq SE, 1,501 fell and 1,003 advanced, while 84 ended unchanged.

Source: UOB Kay Hian Research - 6 Jan 2017