Tuesday, September 6, 2011

FBM KLCI Outlook: External Factors Rule

Bursa Recap: KLCI fell 8.8 points
Regional bourses ended mixed after registering heavy losses in the early sessions. Investors’ mood remained fragile as doubts resurfaced over the political will of Italy and Greece to push through tough budget measures and as Germany hardened its stand against providing more aid, spooking concerns of a looming global recession.

The FBM KLCI lost 8.8 points while market breadth was negative with 253 gainers as compared to 423 losers.

FBM KLCI Outlook: External newsflows to dictate KLCI direction
Against external uncertainties and lack of domestic positive newsflows, we continue to advocate risk-averse 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.

Given that the KLCI is still unable to violate immediate resistance levels of 10-d SMA and mid Bollinger band, near term outlook will remain negative and the index is likely to retest the 1445 points (lower Bollinger band). A breach below this support will push index lower towards YTD low of 1423 and 1400 levels.

Source: HLeBroking

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