Sunday, July 10, 2011

FBM KLCI Is Facing Strong Resistance Around 1610 Points

Bursa Recap: KLCI inches closer to 1600 points
The FBM KLCI was traded within a range of 10 points between an intra-day high of 1594.74 (+4.5 points) and a low of 1584.94 (-5.5 points), before active fund buying in the last hour pushed the FBM KLCI to close at a fresh historic high at 1594.7 (+0.7% wow).

Despite the index gains, market breadth was negative (Gainers: 287; losers: 390) and volume was 25% lower at 811m shares, as investors’ appetite was restrained by the growing tensions prior to the 9 July Bersih rally.

FBM KLCI Outlook: Facing strong resistance at 1610 zones
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 arising from the heath of global economy and Eurozone debt crisis. Technically, we remain optimistic that the KLCI will continue to test our envisaged upside resistance near 1600-1610 zone in the near term, as the daily and weekly MACDs continue to paint a bullish landscape.

However, given the more extreme overbought daily slow Stochastic and a 4-month high RSI, as well as in anticipation of more volatile Wall St during the ongoing reporting season, Bursa Malaysia will most likely experience a profit-taking consolidation this week. Key supports are ports are 1581 (10-d SMA) and 1570 (mid Bollinger band).

Daily KLCI Tough Resistance Levels Near 1600-1610 Levels
FBM KLCI 11-07-2011

Source: HLeBroking

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