Wednesday, October 26, 2011

FBM KLCI: More consolidation ahead

Bursa Recap KLCI up 7.8 points to 1458, the highest since 9 September
Asian markets wavered amid overnight Wall Street losses following a decline in Oct consumer confidence and ahead of the crucial 2nd EU summit on 26 October.

However, sentiment improved as Chinese Premier Wen Jiabao said China should "fine tune" its policy at an appropriate time, which investors took to mean monetary policy could become more accommodative.

Bursa Malaysia was closed yesterday due to Deepavali holiday. On 25 Oct, the FBM KLCI jumped 7.8 pts to 1457.8, spurred by late fund buying of selected key blue chips. Despite the positive gains, market breadth was negative ahead of a crucial
announcement on how Europe plans to stem its debt crisis.

FBM KLCI Outlook: More consolidation ahead
While awaiting a more detailed resolutions by Euro finance ministers in Nov (after failing to finalize a master plan yesterday), overnight gains on Dow and news that China will buy bonds issued by the EFSF should bode well for broader markets.

Maintain SELL INTO RALLY or TAKE PROFITS near our envisaged resistance targets of upper Bollinger band (now at 1478 pts) and 100-d SMA (at 1497). Immediate pullback supports are 1436 (50-d SMA), 1410 (30-d SMA) and the 1400 psychological levels.

Daily KLCI: Facing Stiff REsistance Near Upper Bollinger Band And 100-Days SMA
FBM KLCI 27-10-2011

Source: HLIB Research

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