Monday, July 11, 2011

KLCI Has More Profit Taking Consolidation Underway

Bursa Recap: KLCI down 6.2 points from as much as -10.3 points intraday
Asian bourses were in red, dragged by global economic worries after an unexpectedly weak U.S. jobs report and surging inflation in China, coupled with escalating worries of a spillover of Greece’s sovereign-debt troubles to Italy.

In line with the tepid sentiment, FBM KLCI lost 6.2 points to 1588.6 while average daily volume and value dropped 12% and 18% respectively to 711 million shares valued at RM1.29 billion.

FBM KLCI Outlook: More choppy session ahead
The Dow Jones’s overnight plunge is likely to dampen our market today, capping any potential rebound driven by the mega O&G newsflow of a proposed SapuraCrest-Kencana merger.

A special purpose vehicle, Integral Key S/B will make a RM11.85 biilion offer to acquire all their assets and liabilities via share swap.

Despite anticipating more profit taking consolidation ahead to digest the overbought positions, we remain positive of KLCI to retest our envisaged 1600-1610 upside targets as long as the 1571 points (mid Bollinger band) is not broken. Further supports are 1553 (50-d SMA) and 1547 (lower Bollinger band).

Daily KLCI Tough Resistance Levels Near 1600-1610 Levels
FBM KLCI 12-07-2011

Source: HLeBroking

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