Market review

• Asian key indices were mostly higher ahead of the Donald Trump’s press conference; Hang Seng Index trended positively towards 22,899.55 pts (+0.68%), marking the fifth consecutive day of gains led by Chinese companies listed in Hong Kong amid stabilizing Yuan, while Nikkei 225 rose 0.33% to 19,364.67 pts.

• Again, the trading interest was fairly strong, given that the overall market traded volumes increased to 2.76bn vs. three month volumes of 1.51bn. The FBM KLCI closed higher at 1,675.21 pts (+0.19 %) on a last minute buying support. Market breadth stayed positive; gainers led losers by 467-to-324 stocks.

• U.S. equities reacted positively after Donald Trump's press conference. The Dow rose 0.50% to 19,954.28 pts. Meanwhile, Brent crude oil soared 2.72% to US$55.10 as Saudi cut supplies to some Asian countries.

Technical view

MACD Line above zero, while Stochastics overbought

• The MACD Line is trending positively above zero, in tandem with the MACD Histogram. The Stochastics oscillator, however is overbought.

Market outlook

• While investor sentiments turned positive after Trump’s press conference, we may expect the Dow’s upside to be capped around 20,000. On the local front, sentiments should remain positive amid recovering crude oil prices. The FBM KLCI is likely to maintain its movement above 200-d SMA. Also, trading focus will still linger around the ACE market.

• Closed positions. We had squared off our positions on MBSB (9.3% gain) after hitting above R2 upside target, and TUNEPRO (1.4% gain) due to expiry.

• Trading Buy – OPENSYS. With share prices holding above the daily and weekly SMAs, coupled with upticks indicators, OPENSYS could poised for a strong breakout above the neckline resistance at RM0.375 and advance further towards RM0.39-RM0.44 in the mid to long term period. Key supports are RM0.355-RM0.365. Cut loss will be located around RM0.345.

• Trading buy – BAHVEST. It is adapting to new strategy to generate higher revenue and profits and diversifying into mining business. Pending both catalysts to materialize, share price has experienced a trendline breakout with increased volumes. Traders may accumulate around RM0.975-RM1.00, target will be set near RM1.09-RM1.18. Support is located around RM0.945 and Cut loss will be initiated if price falls below RM0.93.

Source: Hong Leong Investment Bank Research - 12 Jan 2017