Tuesday, July 12, 2011

KLCI Market to Remain Choppy Amid External Wild Wwings

Bursa Recap: KLCI down 10.5 points on external woes
Major Asian bourses tumbled (e.g. HSI:-3.1%; KOSPI:-2.2%; TWSE:-2.0%; ASX200:-1.9%) amid overnight slump on Wall Street as fresh fears about the spread of Europe’s debt crisis rattled investors. The lack of resolution in the U.S. debt-ceiling talks added to the uncertainty over the broader global economy.

In line with the bearish sentiment, FBM KLCI index lost 10.5 points to 1578.1, weighed by losses in MAYBANK (-8 sen to RM8.90), MISC (-23 sen to RM7.56), PLUS (-3 sen to RM4.38), GENTING (-10 sen to RM11.00) and PPB (-38 sen to RM17.30).

Due to growing risk aversion among investors, 10-year MGS yield tumbled from 3-month high of 4.11% to 3.87% yesterday.

FBM KLCI Outlook: Market to remain volatile
As the KLCI had surged 6% from 3-month low of 1507 (6 May) to recent high of 1597 (11 Jul), current profit taking consolidation is healthy to digest the overbought position. Hence, the local bourse is likely to remain choppy in the near term given the low volume as well as external uncertainties and volatility.

After breaching the 10-d SMA of 1584 points, the next support levels are 1573 (mid Bollinger band) and 1566 (30-d SMA), which must hold to prevent further dip towards critical Up-Trend-LIne (UTL) support near 1560. Immediate resistance remains at 1600-1610.

Daily KLCI Crucial Up-Trend-Line (UTL) Support Near 1560 Points
FBM KLCI 13-07-2011

Source: HLeBroking

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