Monday, July 18, 2011

FBM KLCI Is Taking Cue From Overseas Markets

Bursa Recap: KLCI tumbles 0.9%, the biggest one day fall since 12 April
Asian shares retreated for the 3rd day as the lack of any breakthrough to the escalating debt crisis in the euro zone and the United States sapped demand for risky assets.

KLCI index also lost 14.7 pts or 0.9%, its biggest plunge since - 1.2% on 12 Apr, spearheaded by CIMB (-19 sen to RM8.56), TENAGA (-22 sen to RM6.52), GENTING (-16 sen to RM10.68), IOICORP (-7 sen to RM5.23) and MAYBANK (-5 sen to RM8.82). Market breadth was negative with 159 gainers as compared to 646 losers.

FBM KLCI Outlook: Taking cues from overseas markets
Despite persistent debates in the U.S. debt ceiling hike before the 2 Aug dateline, Obama said progress is in the making and Congress is likely to add a balanced-budget amendment to the Constitution before the debt-ceiling debate moved to Capitol Hill.

Weakening daily trend indicators are suggesting FBM KLCI should fall further before stabilizing this week as hourly chart are pointing to extremely oversold positions and buyers are likely to re-enter the market to bargain hunting for technical rebound after further decline.

After breaching the 1576 (mid Bollinger band) and 1569 (30-d SMA) support levels, a breakdown below the uptrend line support of 1560 is likely today and could exert greater liquidation pressure towards 1550 (38.2% FR) and 1536 (50% FR) levels. Risk takers can buy on dips near 1550 points for eventual rebounds towards 1576-1595 zones.

Hourly KLCI Expect Diminishing Selling Pressures Amid Extremely Oversold Indicators
FBM KLCI 19-07-2011

Daily KLCI: A Fall Below Up-Trend-Line Near 1560 Will Spur Index Lower Towards 50% FR
FBM KLCI 19-07-2011a

Source: HLeBroking

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