Profit taking likely but uptrend intact

The stock market's uptrend is still intact but there could be further profit-taking activities this week, analysts said.

The market will largely find direction from the US, with economic data coming out of there this week expected to be better than anticipated.

This may help bring back investors to the US markets after the Dow Jones Industrial Average (DJIA) tumbled last Friday.

One of the reasons US stocks fell was over concern that China might raise interest rates to slow its booming economy. Any such move to cool the economy may hurt demand for products. The DJIA had its worst weekly drop in three months.

At home, further corporate results and a material announcement by Time dotCom Bhd is expected to move certain counters.

Time dotCom had requested its shares to be halted mid-morning last Friday pending the announcement. The shares, which last traded at 77 sen, were the third most active in the market before being suspended.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) hit an all-time high of 1,528.01 points last Wednesday, but closed the week lower at 1,499.81, easing 0.8 per cent from the previous week.

The market was due for a correction after its recent stunning rally, said a broker with a local securities firm.

He sees immediate support for the FBM KLCI at 1,495 points.

"Technically, it (FBM KLCI) must hold at above ... the 1,500 psychological level to protect the bullish short-term technical momentum and to avoid triggering more selling signals on the chart," RHB Research said in a note to clients last Friday.

By Adeline Paul Raj