Wednesday, April 6, 2011

KLCI Is Downside Bias On Profit Taking Consolidation

Bursa Recap: KLCI ends 2.4 points lower, snapping 5-day winning streak
In line with mixed regional markets, the FBM KLCI fell 2.4 points to 1553.1, snapping its 5-day winning streak, amidst concern of more rates hike by the developed countries and China to clamp on rising inflation. Investors were also concerned on the report that Tokyo Electric Power Co has begun dumping radioactive water.

Trading volume decreased to 1.6 billion shares worth RM1.97 billion against Monday's 1.69 billion shares worth RM2.24 billion.

Yesterday, the People’s Bank of China announced a hike in 1-year lending rate by 25bps (the 4th since Oct 10) to 6.31% before the market reopens today after a 3-day holiday.

FBM KLCI outlook: Easing trends
We reiterate our near term positive view on the FBM KLCI after last week's breakout rally and positive domestic newsflows.

However, the index should pause for profit-taking given the overbought signals, as well as taking clues from overseas markets following more hawkish tome from the Fed and China’s 4th rates hike since Oct 10 yesterday.

Immediate resistance levels are 1565-1577 whilst support levels are situated around 1525-1537.

FBM KLCI Has More Profit Taking Consolidations Amid Weakening Technicals.
FBM KLCI 06-04-2011

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