Wednesday, March 30, 2011

KLCI Positive Breakout Above Down-Trend-Line Likely To Spur Testing Of 1525-1538 Resistance Zones

Bursa Recap: KLCI has a positive breakout amid active interest in lower liners and selective heavyweights.
Shrugging off lukewarm regional markets, the FBM KLCI closed +5.8 points at 1520, supported by active buying interests in lower liners and selective index-linked heavyweights.

Market breadth was positive with 543 gainers against 264 losers, spurred by higher trading volume (+37% to 1.78bn shares) and value (+35% to RM2.78bn) against Monday.

Leading movers were PETCHEM (+23 sen to RM7.18), SIME (+9 sen to RM9.19), AXIATA (+4 sen to RM4.76), MAYBANK (+3 sen to RM8.78) and GENTING (+4 sen to RM10.50).

FBM KLCI outlook: A positive breakout yesterday and overnight Dow Jones gain will spur KLCI to test higher resistances.
Given the overnight gain on Wall Street and a strong KLCI closing at intraday high, the benchmark rally is likely to test the resistance zone of 1526 (50% FR) and previous 4 March intraday high of 1530 pts (also the upper Bollinger band). Further resistance levels are 1538 (38.2% FR) and 1552 (23.6% FR).

In our view, nagging concerns on Japan’s nuclear crisis, more downgrades of European sovereign ratings, and a respite in crude oil prices remain the immediate concerns that would cap further upside beyond 1538 points, unless fresh catalysts emerge during the upcoming 12 April Invest Malaysia and a resounding victory by BN in the 16 April Sarawak state election.

Immediate supports levels are situated around 1508 (mid Bollinger band) and 1500 psychological barrier.

KLCI Positive Breakout Above Down-Trend-Line Likely To Spur Testing Of 1525-1538 Resistance Zones
FBM KLCI 30-03-2011


Source: HLeBroking

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