Thursday, May 5, 2011

KLCI Has More Downside Amid Bearish Overseas Markets

Bursa Recap: KLCI slides 7 points ahead of MPC meeting and lower regional markets.
Regional markets fell amid concerns over slower global economic recovery and further monetary tightening to curb inflation.

Tracking negative regional bourses, and in anticipation of possible rise in SRR and OPR, the FBM KLCI lost 7.3 points to 1521.2. Turnover was lower at 859m shares worth RM1.27 billion from 1.20 billion shares worth RM1.51 billion on Wednesday.

As expected, BNM announced a 25 bps hike in OPR to 3% and another 100 bps increase in SRR to 3%.

BM KLCI outlook: Downside bias amid negative external markets.
Although the hikes in OPR and SRR were anticipated by the market, the weak performance of Dow and regional markets lately could imply further consolidation in the near term.

After the breakdown below UTL of 1525 pts, immediate retracement supports are situated at 1513 (61.8%) and 1498 (76.4% FR). Further supports are 1483 (200-d SMA) and 1474 (6-month low).

To confirm further rally, the candles need to surpass the 1525 and 1531 (mid Bollinger band), before it could charge towards 1537 (38.2%), 1553 (23.6% FR) and April’s high of 1565.

KLCI Is Downside Bias Towards Lower Bollinger Band After The Breakdown Below The Uptrend Line Support.
FBM KLCI 06-05-2011

Source: HLeBroking

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