Thursday, May 12, 2011

FBM KLCI Profit Taking Is Likely To Be Well-Absorbed

Bursa Recap: KLCI surges 12.7 points on stronger regional bourses and speculation of early snap polls
Asian stock markets ended mostly higher but were off their morning highs after April’s CPI of 5.3% (consensus: 5.2%) in China suggested further tightening measures from Beijing are likely.

In line with higher regional bourses, higher April’s palm oil exports and speculation of an early election in 2H11, the FBM KLCI soared 12.7 pts to 1236. Leading movers were SIME (+21 sen to RM9.05), GENTING (+18 sen to RM11.36), MAYBANK (+7 sen to RM8.77), PETCHEM (+15 sen to RM7.03) and HLBANK (+52 sen to RM12.02).

Last night, PM rallied his party, UMNO to remain united as the country faces the prospect of possible snap polls at end 2011.

FBM KLCI outlook: Profit taking is likely to be well-absorbed
The FBM KLCI is likely to witness some profit taking activities today on overnight Dow’s plunge. However, any profit taking activities are likely to be well-absorbed in anticipation of more positive newsflows from the acceleration of ETP projects, 1Q11 reporting season and speculation of early snap elections.

As technicals are on the mend following the strong breakouts of key hurdles at mid Bollinger band (1527), down-trend-line (DTL) of 1530 and 30-d SMA (1534), KLCI is likely to retest higher upside targets at 1552 (23.6% FR) and 1566 (April’s high).

While the three days recovery is encouraging, subsequent gains must be backed by revival of buying momentum in excess of one billion shares to sustain the uptrend. Immediate support levels are 1527, 1521 and 1516 (lower Bollinger band).

KLCI Is Likely To Trend Higher As Technical Are On The Mend.
FBM KLCI 12-05-2011

Source: HLeBroking

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