Thursday, February 24, 2011

FBM KLCI Next Support At 1474

KLCI may rebound on easing oil prices. Market may stage a mild technical rebound as oil prices ease after hitting above US$100/barrel.

Bursa Recap
In line with the sluggish regional bourses, following another overnight 0.9% plunge on Dow amid escalating crude oil prices, the FBM KLCI tumbled 1.4% to 1489.9 on heavy selldown on bluechips and lower liners.

Trading volume increased to 2 billion shares worth RM2.62 billion as compared to Wednesday’s 1.7 billion shares worth RM2.05 billion on renewed foreign liquidation, reflected by rising daily participation by foreigners to around 26% and weakening RM against greenback (the lowest since January 12).

Market breadth was negative with 116 gainers vs 863 losers.

FBM KLCI Outlook
In the short term, the local bourse will experience more wild swings ahead on renewed foreign liquidations and investors are taking a wait-and-see approach with regards to the ongoing crisis in Mideast.

Due to 1.4% fall on KLCI yesterday, technical readings and investor’s sentiment are turning more bearish following the breakdown of major support levels such as the 1500
psychological level and lower Bollinger band.

We may see some technical rebound today in the wake of steadier Dow overnight and moderating oil price. However, bearish sentiment may trigger more downside consolidations to the index to lower supports before staging a more meaningful
recovery at a later stage.

Lower support levels now are situated around 1474 (3Month low) and 1448 (38.2% FR) whilst immediate resistance levels are 1500, 1519 (mid Bollinger band) and 1528 (50-d SMA).

FBM KLCI Next Support At 1474
FBM KLCI 25-02-2011

Source: HLeBroking

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