Wednesday, September 28, 2011

FBM KLCI: Headline Driven Market

Bursa Recap: KLCI up 7.4 points in volatile trade
Asian stocks pared their earlier gains as investors awaited news of a concrete resolution to Europe's debt crisis.

The KLCI gained 7.4 points to 1371.6 but trading volume decreased to 850 million shares worth RM1.52 billion against Tuesday’s 909 million shares worth RM1.6 billion as investors turned more cautious following fading optimism over plans to contain the euro zone debt crisis.

Plans to increase the financial firepower of the euro zone's €440 billion rescue fund face opposition in Germany, while a Financial Times report said that a split had opened up within the currency bloc over the terms of Greece's next bailout.

FBM KLCI Outlook: A headline driven market
Near term market will remain choppy on heightened concern that European leaders have differing views on resolving the eurozone’s debt troubles, as fears of a disorderly default would be similar to and possibly more damaging than Lehman Brothers’ collapse. According to newswire, the troika (EU, ECB and IMF) is scheduled to resume its mission to Athens today while the German parliament will vote on changes to the European Financial Stability Facility (EFSF) rescue fund.

Technically, there could still be legs left in this rebound but the renewed selldown on Wall St and European markets overnight could dampen sentiment again. Immediate supports are 1310 (26 September pivot low), 1300 and 1293 (38.2% FR from 311 low and 1597 high). Immediate resistance levels are the 1377-1387 gap (23 September), 1393 (10-d SMA) and 1400 psychological barrier.

Daily KLCI Has A Rocky Road Ahead Near 10-Days SMA Despite Breaching The 5-Days SMA Resistance

FBM KLCI 29-09-2011

Source: HLeBroking

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