Sunday, July 17, 2011

FBM KLCI: Crucial Uptrend Line Support Near 1560 To Prevent Further Selldown

Bursa Recap: KLCI falls 2.6 points last Friday, posting a weekly loss of 1.1%
Asian markets ended mixed after Bernanke discounted suggestions of more near-term stimulus for the struggling U.S. economy coupled with Moody’s statement of a possible downgrade of the greenback triple-A bond rating.

Tracking the lethargic regional bourses, FBM KLCI lost 2.6 points to 1577.3 last Friday in lackluster trade as volume tumbled to 6-week low at 697m shares as investors stayed on the sidelines amid the lack of local fresh leads to offset external headwinds.

Wow, after climbing to all time high of 1597.1 on 11 July, the KLCI plunged to as low as 1573.5 last Friday before settling at 1,577.3 (-1.1% wow). Average daily traded volume and value also dropped 18% and 16.7% to 760m shares valued at RM1.44bn, respectively.

FBM KLCI Outlook: Crucial uptrend line support near 1560 points
Although the FBM KLCI continued to scale new highs last week amid selective index-linked buying, overall participation was not strong and broad based, signaling investors persistent concern on external headwinds.

This week, we continue to expect more thin volume sideways consolidation in the absence of meaningful leads. The sideways consolidation movement could be prolonged but we remain positive for the short to medium term.

After breaching the 10-d SMA of 1584 points, the next support levels are 1576 (mid Bollinger band) and 1568 (30-d SMA), which must hold to prevent further dip towards critical uptrend line support near 1560. A break below 1560 points will exert greater liquidation pressure towards 1539 territory (100-d SMA).

Daily KLIC: Crucial Uptrend Line Support Around 1560 Must Hold To Prevent Further Selldown
FBM KLCI 18-07-2011

Source: HLeBroking

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