Wednesday, July 20, 2011

FBM KLCI Immediate Upside Resistance At 1570-1580 Levels

Bursa Recap KLCI up 7 points amid Dow overnight strong gains
Asian markets were positive in the wake of gradual progress on the U.S. debt ceiling debate and Europe zones debt crisis coupled with strong earnings results from Apple and IBM boosted investor confidence.

The FBM KLCI rose as much as 9.3 points but ended 7 points higher to 1562.6. However, trading volume decreased to 803m shares worth RM1.3bn as compared to Tuesday’s 978m shares worth RM1.94bn as most investors continued to stay on the sideline.

FBM KLCI Outlook: Immediate upside resistance at 1570-1580 points
We are not completely out of the woods with regards to the lingering concerns of the U.S. debt-ceiling and Europe debt crisis issues. Hence, near term Bursa Malaysia market direction will take cue from the daily newsflows from these developments and
the ongoing U.S. reporting season. Pending firmer clarity, the KLCI may encounter stiff resistance around 1576-1580 points.

We reiterate that current uptrend will remain intact if KLCI is able to sustain above the 1560 points. A break below 1560 points would trigger more selling pressures towards lower supports at 1555 (lower Bollinger band), 1541 (100-d SMA) and 1536 (50% FR from 1474-1598 pts) points.

Today is the listing of Bumi Armada, Malaysia’s biggest IPO and the 2nd largest in ASEAN in 2011. Couple with the proposed merger of Kencana and SapuraCrest as well as high oil prices, interests in oil and gas stocks could be re-ignited.

Technically, we see upside potentials (please refer to overleaf charts) in PCHEM (technical TP: RM7.30-7.50), ALAM (technical TP: RM1.05) and DIALOG (technical TP: RM2.80).

Daily KLCI Has Stronger Relief Rally To Resume If Index Can Violate The 5-Days SMA Near 1567 Points
FBM KLCI 21-07-2011

Source: HLeBroking

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