Sunday, August 21, 2011

KLCI Has More Downside Consolidation Amid External Woes And Long Holidays Next Week

Bursa Recap: KLCI down 1.3% amid overnight 3.7% plunge on Dow Jones
Regional bourses slumped, led by losses at KOSPI (-6.2%), TWSE (-3.6%), STI (-3.2%) and HSI (-3.1%) amid Dow Jones’ overnight 3.7% plunge on double dip recession fears and the continued credit crisis at European markets.

Tracking the miserable regional markets, KLCI slipped 19.3 points to 1484, off intraday low of 1477.7 (-25.6 points). With the hefty losses, KLCI only managed a 0.02% gain wow.

FBM KLCI Outlook: Crucial supports at 1443-1466 points
In the wake of bleak U.S. data, sovereign debt concerns and worries over the health of banks in Europe, we reiterate our cautious stance on Bursa Malaysia since spotting a “dead cross” of the 20-d SMA below the 50-d SMA coupled with the breakdown below 200-d SMA (now at 1530 points) in early August, which usually indicate a bearish-cycle and threatens to open the window for a prolong downtrend.

Indicators are weak, implying the local bourse may drift lower in quiet trading ahead of the long holidays next week. As such, we only advocate investors to stay defensive or sidelines.

Alternatively, for risk-takers, adopt a short term trading oriented approach to buy on sharp falls in share prices and sell into any rebound. Immediate resistance levels are 1500-1530.

Key support levels are 1470 (the neckline support before 9 Aug’s rout) and 1466 (50% FR). A breakdown below 1466 will trigger more downside risks towards 1423-1443 zones.

Daily KLCI: Immediate Term Support Is Near The Lower Bollinger Band To Prevent Further Slump Towards 1423 Points Again
FBM KLCI 22-08-2011

Weekly KLCI: Medium Term Support Is Near The 100-Days SMA Around 1410 Points To Prevent Further Selldown To 61.8%FR Or 120-Days SMA Around 1368 Points
FBM KLCI 22-08-2011a

Source: HLeBroking

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