Monday, September 26, 2011

FBM KLCI Tumbles 34 Points, Off Intraday Low Of -55 Points

Bursa Recap FBM tumbles 34 points, off intraday low of -55 points
Asian stocks tumbled as lack of apparent progress on solving Europe’s sovereign-debt problems and concern of a hard landing in China’s economy fueled risk aversion and sent investors out of equities. Tracking the slump in key ASEAN markets (i.e. SET: -
5.7%; PSE: -4.2%; JCI:-3.2%), FBM KLCI skidded 34 points or 2.5% to 1331.8, off intraday low of 1310.5 (-55.4 points).

Meanwhile, persistent reversal of liquidity flows on flight to safety in the greenback weakened the Ringgit to 3.18/US$, its lowest close in 14 months.

FBM KLCI Outlook: Taking cues from overseas
The overnight strong rebounds on Wall St and Europe markets should bode well for Bursa Malaysia today. However, any rally will not be sustained unless it is accompanied by actual progress on resolving the euro-area crisis and/or supporting global growth. Hence, investors’ confidence will remain fragile, as continuous institutional liquidation activities are likely to the market in the short term.

On the monthly chart, the KLCI remains vulnerable to further downward correction towards 1259 (lower Bollinger band) and 1200 (50% FR) in the medium to long term. Immediate supports are 1310 (26 September pivot low), 1300 and 1293 (38.2% FR). Without a firm recovery in euro-zone solution, any market bounce-ups from an oversold position will likely be short-lived. Based on the daily charts, resistance levels are 1363 (lower Bollinger band), 1383 (5-d SMA) and 1409 (10-d SMA).

Daily KLCI Shows Steeply Oversold As RSI Falls Below 20
FBM KLCI 27-09-2011

Monthly KLCI Shows More Downward Correction In The Medium Term Amid Bearish Technicals
FBM KLCI 27-09-2011a

Source: HLeBroking

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