Monday, May 30, 2011

Daily KLCI Resistance At 1552-1565 Points

Bursa Recap: KLCI down 5.9 points ahead of new tariff announcent
Regional bourses ended mixed in thin trading with Wall St closed for Memorial Day holiday on 30 May. Investors are cautious before the release of U.S. jobs data on Friday as well as awaiting more debt restructuring plans from Greece this week.

In line with the cautious regional markets and worries about domestic rising inflationary pressures and slower GDP growth in anticipation of electricity tariff & gas price hikes, the FBM KLCI was down 5.9 points to 1542.8 points.

Due to the nagging external and domestic uncertainties coupled with the start of a two-week school holiday, volume declined to 0.7 billion shares worth RM1.24 billion against last Friday’s 0.95 billion shares worth RM1.69 billion.

FBM KLCI outlook: Inflationary concern will dampen sentiment
With higher gas & electricity rates, FBM KLCI is likely to face a temporary setback in its current rally, as sentiment will be dampened by worries about the rising inflationary pressures and slower GDP growth. Besides, persistent Euro debt crisis and the impending release of key U.S. economic data will drive more investors to the sidelines. However, this should be cushioned by the positive impact on TNB.

Hence, we expect renewed sideways consolidation with immediate resistance at 1552 (23.6% FR) and 1565 (April’s high), whilst support levels fall on 1537 (38.2% FR), 1525, 1516 (lower Bollinger band) and 1507 (May’s low) points.

Daily KLCI Resistance At 1552-1565 Points
FBM KLCI 31-05-2011

Source: HLeBroking

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