Tuesday, August 23, 2011

FBM KLCI Relief Rally Targets At 1510-1530

Bursa Recap: KLCI jumps 10.2 points amid strong regional performance
Regional markets rallied amid better-than-expected HSBC China’s manufacturing PMI for August and optimism the Fed may take steps to boost the U.S. economy.

Tracking the strong regional rallies, FBM KLCI jumped 10.2 pts or 0.7%, driven by gains in IOICORP (+19 sen to RM4.64), GENTING (+19 sen to RM9.70), PBBANK (+12 sen to RM13.02), MISC (+20 sen to RM7.28) and MAYBANK (+6 sen to RM8.70). Trading volume and valued rose 3% and 5% respectively to 876 million shares worth RM1.76 billion.

FBM KLCI Outlook: Upside likely cap at 1530 points
In the wake of the robust 3% rally on Dow overnight, we could witness similar strength on regional markets and Bursa Malaysia today.

However, we would like to caution investors that current rebound could be disappointed if Bernanke speech this Friday fails to live up to market expectations for stimulus measures. Moreover, the long holiday week ahead could prompt quick profit taking given the volatile DM.

As such, we advocate investors to capitalize on any rallies to trim their position. Alternatively, for risk-takers, adopt a short term trading oriented approach to take profit into any rebound. Please refer to TABLE A for potential technical rebound plays.

Immediate resistance levels are 1500-1530. Key support levels are 1470 (the neckline support before 9 Aug’s rout) and 1466 (76.4% FR). A breakdown below 1466 will trigger more downside risks towards 1452 (lower Bollinger band).

Daily KLCI Upside Likely To Cap At 1530 Points
FBM KLCI 24-08-2011

Source: HLeBroking

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