Thursday, May 5, 2011

FBM KLCI Is Cautious Ahead of MPC Meeting Today

Bursa Recap: KLCI falls 3 points amid sluggish regional markets
Ahead of the MPC meeting today, the FBM KLCI extended its losses for the 3rd consecutive days as the index fluctuated within 1537.7 (+6.2 pts) and 1519.8 (-11.7 points) before ending 3 points lower at 1528.4.

The fall was in line with regional markets owing to fears of more monetary tightening measures to curb spiraling inflation and retaliatory attack amid the demise of Osama bin Laden.

Meanwhile, the 10-year MGS spike 0.14% to 4.16%, signaling a possible interest rates hike today to avoid the risk of falling behind the curve in combating inflation.

FBM KLCI outlook: Cautious ahead of MPC meeting today
In the wake of negative external markets and ahead of the MPC meeting today, the local bourse is likely to trade with a downward consolidation, similar to yesterday’s trading pattern.

Immediate supports are situated around 1525 (100-d SMA) and 1520 (50% FR)/. Failure of the index to close at 1520 will drive index lower to 1511 (lower Bollinger band) and 1500 psychological support.

Meanwhile, to confirm further rally, the candles need to surpass the 1533 (mid Bollinger band) and 1544 (23.6% FR) resistance levels, before it could charge towards April’s high of 1565 and all-time high of 1577 points.

Daily KLCI: A Break Below Lower Bollinger Band Will Drive Index Lower To 1500 Points.
FBM KLCI 05-05-2011

Source: HLeBroking

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