The FBMKLCI slid 2.25pt to close at 1,736.80, dragged down by extended profit taking on index stocks despite positive sentiment across the region. Asian shares were mixed on Thursday with Tokyo recovering after snapping a 16-day winning streak the previous day. The FBMKLCI’s top gainers were IJM Corporation (+0.9%), Maxis (+0.7%) and Axiata Group (+0.6%), while the top losers were IHH Healthcare (-2.4%), YTL Corporation (-1.5%) and AMMB Holdings (-1.1%). In the broader market, gainers outpaced losers 420 to 383 with 421 counters unchanged. Turnover was 2.53b shares valued at RM2.13b. The FBMKLCI did not establish the needed positive follow-through yesterday in order to validate the earlier “inside bar” pattern as the index continued to slide lower to close at 1,736.80 yesterday. Despite the current weakness, the overall trend remains bullish as the FBMKLCI is rising consistently along the trendline. Moving forward, the current hiccup should not last long as we expect the temporary pullback to ease once the selling pressure diminishes. Support and resistance levels are as follows:

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

US stocks ended mostly higher on Thursday as a fusillade of better-than-expected corporate results helped to reinvigorate Wall Street buying appetite a day after the S&P 500 and the Dow posted their biggest drops in more than seven weeks. The House of Representatives narrowly passed a budget bill on Thursday, which paves the way for the senate to later pass a tax-reform package with a simple majority, instead of 60 votes. The DJIA rose 71.40 pts, or 0.3%, to 23,400.86. The S&P 500 gained 3.25 pts, or 0.1%, at 2,560.40, while the Nasdaq Composite Index edged down 7.12 pts, or 0.1%, at 6,556.77.

Source: UOB Kay Hian Research - 27 Oct 2017