Heavy buying pushed KLCI to unexpected short term record high

While locally facing short lived political crisis. Before market open we see strong buying across index linked stocks. Even KLCI futures co-ordinated huge long position lifted KLCI higher and maintained strong momentum through out the day. At closing near 1880 KLCI created another record high in history tracing Dow Jones.

Honestly, we don’t think there is a link between Dow Jones record close to KLCI. We are surprise with many external and internal problems surrounding the financial market. We still see persisted buying across the board. We look around the whole ASEAN market and we found Indonesia, Thailand and Taiwan have the same pattern. It is definitely institutional buying but we are not sure if it is speculative or long term.

For short term, it should help on trading sentiment. We will turn short term positive and revive our range bound call. Market may challenge another record close if the buying persist.

In summary, we don’t recommend buying into the market. Perhaps, sell if the stocks over value but also let the profit ride by not disposing urgently. Perhaps, we will short back the market if KLCI near 1900. We see this level as strong resistance if there is not fundamental changes at the moment.