Tuesday, May 3, 2011

KLCI Is Moving Sideways Ahead of The MPC Meeting Tomorrow

Bursa Recap: KLCI down 3.5 points amid cautious regional markets.
In line with the cautious regional markets owing to fears of spiking inflation and retaliatory attack amid the demise of Osama bin Laden.

Share prices on Bursa Malaysia closed lower amid cautious trading in regional markets. Asian markets were mixed as investors turned cautious on renewed concern about European sovereign debt and the fragile global economy. On the local front, mild profit taking seen in most counters with the undertone of the market weak and volume lackluster. At close, the FBM KLCI slipped 3.48 points to 1,531.47 ahead of the crucial Bank Negara MPC meeting tomorrow.

FBM KLCI outlook: Sideways ahead of MPC meeting tomorrow.
The FBM KLCI was in a tight range bound consolidation for the past one month since reaching a high of 1565 pts on 4 April and is like to continue so ahead of the MPC meeting tomorrow. Once this consolidation ends, prices could swing to new highs from here, as suggested by the upward consolidations of daily MACD.

To confirm this rally, the candles need to surpass the 1535 (mid Bollinger band) and 1544 (23.6% FR) resistance levels on high volume before it could charge towards 1565. Immediate downside supports are 1520 (50-d SMA), 1511 (lower Bollinger band) and 1500.

The FBM KLCI could surpass the historical high of 1577 pts recorded on 6 Jan, should there be more positive 1QCY11 earnings surprises (in May reporting month) and OPR hike during the MPC meeting tomorrow, which will further enhance the appeal of the Ringgit and Ringgit-denominated assets as the rate gap widens.

Daily KLCI Is Consolidating Around The 50-Days SMA As Index Is Still Unable To Breakout Decisively Above The Mid Bollinger Band.

FBM KLCI 04-05-2011

Source: HLeBroking

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