The FBMKLCI added 0.82pt to close at 1,741.47 yesterday buoyed by positive earning in the selected index-linked counters while lower-liners stealing the spotlight amid bargain hunting across the board. Meanwhile, Asian shares were mixed on Monday with Tokyo up sharply as Prime Minister Shinzo Abe's coalition returned to power with a super majority, setting the benchmark index up for its 15th straight daily gain. The MSCI Asia Pacific Index dipped 0.2%. The FBMKLCI’s top gainers were Petronas Gas (+1.8%), Astro Malaysia Holdings (+1.4%) and Axiata Group (+1.2%), while the top losers were Genting Malaysia (-2.1%), Petronas Dagangan (-0.83%) and IOI Corporation (-0.67). In the broader market, losers outpaced gainers 453 to 434 with 365 counters unchanged. Turnover was 2.73b shares valued at RM1.95b.

From a technical perspective, the FBMKLCI is forming a bullish Harami on the daily chart and closed at 1,741.47 yesterday. Despite the positive gain yesterday, the short-term downtrend is still intact, implying potentially negative sentiments. Given the RSI is still trading below the 50pt threshold level; the selling pressure has not been fully absorbed. Thus we expect more sideways movements ahead with long-term bullish bias remaining intact. Support and resistance levels are as follows:

• Support: 1,729,1,713
• Resistance: 1,766, 1,778

US stocks were lower after the close on Monday, as losses in the Telecoms, Oil & Gas and Consumer Services sectors led shares lower. At the close in NYSE, the DJIA declined 0.23%, while the S&P 500 index fell 0.40%, and the NASDAQ Composite index declined 0.64%. Falling stocks outnumbered advancing ones on the NYSE by 2,060 to 1,020 and 137 ended unchanged. On the Nasdaq Stock Exchange, 1,708 fell and 791 advanced, while 134 ended unchanged.

Source: UOB Kay Hian Research - 24 Oct 2017