The FBMKLCI closed 2.21pt higher at 1,757.24 yesterday in a technical rebound. Meanwhile, Asian shares gained after Wall Street managed to weather a fresh twist in the controversy over US President Trump's alleged connection with Russia, while investors looked ahead to Federal Reserve Chair Janet Yellen's comments. The FBMKLCI’s top gainers were Axiata Group (+5.0%), Hap Seng Consolidated (+2.9%) and Astro Malaysia Holdings (+1.9%), while the top losers were DiGi.Com (-2.0%), Petronas Chemicals Group (-1.3%) and CIMB Group Holdings (-1.3%). In the broader market, gainers outpaced losers 460 to 362 with 376 counters unchanged. Turnover was 1.79b shares valued at RM1.77b. Based on the daily Ichimoku chart, the FBMKLCI penetrated and traded below the Ichimoku’s kumo (cloud), which indicates a bearish signal. Follow-through selling pressure would create another negative candle, thus potentially dragging down the index to retest the next support level of 1,752-1,742 in the near term. While we remain bullish over the long term as the trendline is still intact, the short- and medium-term outlook is bearish mode. Support and resistance levels are as follows:

• Support: 1,752,1,742
• Resistance: 1,787, 1,800

US stocks rose on Wednesday, pushing the Dow to a record high close, after Federal Reserve Chair Janet Yellen said interest rates hikes would be gradual and rates will not have to rise much further to reach a neutral level. At the close in NYSE, the DJIA gained 0.57% to hit a new all-time high, while the S&P500 index climbed 0.73%, and the NASDAQ Composite index climbed 1.10%. Rising stocks outnumbered declining ones on the New York Stock Exchange by 2,385 to 744 and 112 ended unchanged; on the Nasdaq Stock Exchange, 1,745 rose and 708 declined, while 165 ended unchanged.

Source: UOB Kay Hian Research - 13 Jul 2017