Sunday, August 14, 2011

FBM KLCI Shows Signs Of Stability Return

Bursa Recap: KLCI up 7.21 in line with overnight Dow Jones’ 4% surge
Tracking the overnight 4% surge on Dow Jnes and higher regional markets, FBM KLCI gained 7.2 points or 0.5% to 1483.7.

After plunging 11% from 52-wk high of 1597 to 1413 points last Tuesday, FBM KLCI had rebounded 4.2% to 1483.7 but still down 2.7% or 40.8 points wow, sparked by worries of a double dip recession in the US, the S&P downgrade, a higher-than-expected inflation data from China and the Europe debt crisis.

FBM KLCI Outlook: Major resistance at 1500-1530 levels
Bursa Malaysia experienced massive panic selling in the early part of last week but selling forces gradually tapered off and bottomed up in the latter part, in tandem with Wall Street and regional bourses.

Although the local bourse rebounded 4.2% from last week’s low, it is highly susceptible to external headline news and volatility as investors are adrift in a sea of conflicting data and emotions, especially ahead of a long holiday week in end Aug. Overall, we remain cautious and will only turn bullish if the KLCI is able to
penetrate the 200-d SMA (1530 points) level on high volume.

Relief rally targets are 1500, 1510 (50% FR) and 1530. Strong downtrend line resistance is situated near 1537 (mid Bollinger band). Support levels are 1470, 1464 (76.4% FR) and 1450 points.

Daily KLCI Relief Rally Targets At 1500-1530 Levels
FBM KLCI 15-08-2011

Source: HLeBroking

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