Tuesday, August 16, 2011

KLCI: 200-day SMA (1531) Next Major Hurdle

Bursa Recap: KLCI up 16 points in line with rallies in regional markets
Regional markets rebounded further amid bargain hunting activities, as sentiment was boosted by better GDP data from Japan in the Apr-June quarter as well as positive expectation of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy today to discuss the ongoing euro zone debt crisis.

The FBM KLCI surged 1.1% or 16.1 points to close at 1,499.74.

FBM KLCI Outlook: Major resistance at 200-d SMA near 1531 points
Continuous strong relief rally from Wall St overnight should drive the FBM KLCI above the 1500 psychological level and to retest the long term resistance at 200-d SMA (now at 1531 points). Although KLCI had rebounded 5.4% from last week’s trough, it is still highly susceptible to external headline news and volatility, especially ahead of a long holiday week in end Aug and first week of September (due to Hari Raya and Merdeka day).

Overall, we remain cautious and will only turn bullish if the KLCI is able to penetrate the 200-d SMA (1531 points now) level on high volume. Relief rally targets are 1510 (50% FR), 1531 and 1535 (strong downtrend line resistance). Support levels are 1470, 1464 (76.4% FR) and 1450 points.

Daily KLCI: Relief Rally Targets At 1500-1530 Levels
FBM KLCI 16-08-2011

Source: HLeBroking

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