Sunday, June 5, 2011

FBM KLCI Is Resilient Despite External Headwinds

Bursa Recap KLCI up 1.8 points to end 0.7% wow higher
Despite persistent external uncertainties, FBM KLCI rose by 1.8 points last Friday due to last minute buying on index-linked counters. Week-on-Week, the KLCI grew 0.7%, mainly due to the gains in Tenaga (approved tariffs hikes) and banking stocks (green light for CIMB and Maybank to begin merger talk with RHBCAP).

However, average weekly volume eased 3% to 814m shares on disappointing reporting season, weak external economic data, European debt woes coupled with school holidays.

FBM KLCI outlook: FBM KLCI: Resilient despite external headwinds
Bursa Malaysia is expected to trade cautiously this week amid external uncertainties. However, expectation of continued strength in the private investments, acceleration of ETP projects and speculation of a snap election by end 2011 would help to buffer spillover impact to the broad market.

Technically, the index is slated to stage an ascending triangle breakout in the near term, which could drive the index to surpass the 1566 (April’s high) and 1577 (all time high) technical resistance and heading towards 1600 points.

For current uptrend to continue, the 10-d SMA or 1546 levels must hold. A breach below 1,546 points will trigger more downside consolidations towards 1,539 and uptrend line along 1,535 points.

Daily KLCI: Pending For An Ascending Triangle Breakout.
FBM KLCI 06-06-2011

Source: HLeBroking

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