Thursday, August 11, 2011

FBM KLCI Relief Rally Target At 1500-1530 Levels

Bursa Recap: KLCI down 4.1 points after tumbling as much as 26 points
Asian markets pared down their early losses with SHCOMP (+1.3%) and KOSPI (+0.6%) turned positive, amid the fallout from fears over Europe's worsening financial crisis and Dow Jones’ 4.6% plunge on 10 Aug.

KLCI also lost 4.1 points in volatile trade as the index fluctuated between 1454 (-26 points) and 1479.4 (-1.1-pt) as investors remained reluctant to place long-term bets on concerns about the US economic slowdown and Europe sovereign debt crisis.

FBM KLCI Outlook: Relief rally targets at 1500-1530 levels
Despite the 4.6% Dow Jones’ plunge on 10 Aug, regional markets did not react overwhelmingly with most of them only ended slightly lower. In the near term, markets are likely to remain volatility.

However, some semblance of stability regained yesterday after recent routs, as the markets have probably discounted a fair bit of the adverse developments in US and Europe. Bursa Malaysia’s panic selling climax is probably over after 9 Aug’s tough of 1423 points (slightly above our envisaged 1413 support i.e. 50% FR from 1597 and 1230) before ending at 1476.5 points yesterday.

Overall, we remain neutral on the market as the KLCI is still able to close above the 1470 points, which is key YTD neckline support before the 9 Aug’s nightmare. We will only turn bullish again if the KLCI is able to maintain its posture above the 200-d SMA (1530 points). Relief rally targets are 1500, 1510 (50% FR) and 1530. Immediate supports are 1450-1470 points.

FBM KLCI Is Base Building Stage
FBM KLCI 12-08-2011

Source: HLeBroking

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