Thursday, March 17, 2011

Daily KLCI: Critical Support At 1474 To Prevent Further Sell-Off.

Bursa Recap: KLCI up 8.3 points on a strong 5.7% rebound in NIkkei.
Key regional bourses recovered as Nikkei 225 rebounded by 5.7% Wednesday, recouping some of the hefty losses suffered the previous two days, even as the threat of a major nuclear radiation leak kept investors on edge.

Investors drew some comfort from the Bank of Japan’s efforts to grease the short-term money markets by injecting massive doses of liquidity. After Tuesday’s fall, the Nikkei 225 2011 P/E of 15x is more in line with its regional peers averaging of 13-14x.

FBM KLCI gained 8.3 points but volume was thin at 931 million shares against Tuesday’s 1.45bn as most investors were sidelined.

KLCI Outlook: Lifeline support at 1474 points to prevent further selldown.
As the situation at Japan’s nuclear power plant remains fluid and the flow of information scattered and inconsistent, investors are likely to stay cautious and defensive amidst the current jittery external sentiment. Moreover, renewed concerns on the health of global economy following the release of a confluence of negative economic data in US and sovereign ratings downgrades are likely to dampen short term trading confidence.

We reiterate our view that the twin bottoms of 1474 points recorded on 28 Feb 11 and 29 Nov 10 are critical support levels which must not be violated.

A breakdown could trigger more sell-off towards 1450 (38.2% FR from low of 1243 and peak of 1577), followed by the major 200-d SMA of 1443. Meanwhile, resistance levels are situated around 1500, 1506 (mid Bollinger band) and 1511 (30-d SMA).

Daily KLCI: Critical Support At 1474 To Prevent Further Sell-Off.
FBM KLCI 17-03-2011


Source: HLeBroking.com

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