Monday, May 16, 2011

FBM KLCI To Consolidate Higher Despite External Uncertainties

Bursa Recap: KLCI jumps 12.7 points to record a 1.7% week-on-week gain
The FBM KLCi surged 12.3 points to 1540.7, led by banking, plantation and oil & gas stocks.

After a 1.3% weekly drop in the week ended 6 May, KLCI rebounded 1.7% after commodity prices recovered from the previous week's plunge, and banks rose after raising their BLR following BNM’s decision to raise the OPR by 25bsp to 3%.

Sentiment was also boosted by news that Petronas will invest RM60 billion in a refinery and petrochemical complex in Pengerang, Johor, which borders Singapore.

FBM KLCI outlook: To consolidate higher despite external uncertainties
FBM KLCI rebounded from intraweek low of 1515.4 last Tuesday to as high as 1545.2 last Friday before ending 1.7% higher at 1540.7. The strong rebound was commendable despite external upheavals i.e. wild swings in commodities and Wall St, European
debt woes and concern of more rates hike in China.

Following the positive breakout of key resistance at 1530 points (downtrend line) and 1537 pts (50% FR) last week, technical indicators have turned more bullish. The bullish technicals and positive expectations of more ETP roll-outs could drive FBM
KLCI to test higher resistance at the 1543 (38.2% FR) and 1552 (23.6% FR) zones. Further upside is April’s high of 1566 points.

Immediate supports are 1537, 1530 and 1525 (50-d SMA). More solid support is situated at 1515 (lower Bollinger band).

Daily KLCI Upside Target At 1543-1552 Points On Positive Breakout And Strengthening Technicals.
FBM KLCI 16-05-2011

Source: HLeBroking

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