Thursday, May 19, 2011

FBM KLCI Golden Cross In MACD Could Signal Steadier Gains Ahea, Major Resistance At 1552 Points

Bursa Recap: KLCI gains 5 points in line with regional rebound
Despite the overnight fall on Dow, regional markets closed steadier as a rebound in commodities prompted investors to look beyond Greece’s debt problems and mixed U.S. economic data.

In line the 0.12% upgrade in the MSCI All Country Asia ex Japan Index Fund and positive expectations of the ongoing 2-day Invest Malaysia in New York, FBM KLCI jumped 5 points to 1541.3. However, market breadth remained cautious with declines outpaced advances 415 to 360 ahead of the 1Q11 GDP announcement.

BNM reported that the Malaysian’s 1Q11 GDP grew slower at 4.6% against 4.8% in the 4Q10. The central bank also maintained its GDP forecast of 5.5% to 6% for 2011, after having factored in inflation and other risk factors.

FBM KLCI outlook: Major resistance at 1552 points
We reiterate our view that the strong technical breakout of key resistance at 1530 points (downtrend line) and 1537 (38.2% FR) coupled with the golden cross in MACD bode well for further upside in KLCI to retest the 1545-1552 points.

However, average daily volume needs to build up to one billion shares for a more sustainable uptrend to surpass 1552 pts and retest April’s high of 1566 points.

Immediate supports stay at 1530 and 1525 (50% FR). More solid support is situated at 1515 (lower Bollinger band).

FBM KLCI Golden Cross In MACD Could Signal Steadier Gains Ahead.
FBM KLCI 19-05-2011

Source: HLeBroking

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